335.4. 

N2Tp 

no.o 


CLJLkS' 


THE  RISE  AND  DECLINE 

OF 

CHRISTIAN 

CIVILIZATION 

BY 


SCOTT  NEARING 


Defending  an  Outmoded  Minority 


“I  believe  from  my  heart  that  the  cause  which  binds  together 
my  peoples  and  our  gallant  and  faithful  allies  is  the  cause  of 
Christian  Civilization.” 

King  George  VI 
Broadcasting  on  Dec.  25,  1939. 


WORLD  RELIGIOUS  BELIEFS 

( World  Almanac  Figures) 
Numbers  in  Millions 


Christians 

Non-Christians 

Percent  Christians 

Americas 

179 

32 

85 

Europe 

455 

19 

96 

Asia 

34 

978 

3 

Africa 

8 

135 

5 

World  Total 

682 

1,167 

36 

(Total  world  population  2,125,000,000.  Only  one-third  of  the 
population  is  nominally  Christian). 


ESTIMATED  PERCENT  OF  PEOPLE  LIVING  UNDER  A 
TRADE  ECONOMY  (CIVILIZATION) 


Americas 

less  than  60  percent 

Europe 

” ” 85 

Asia 

2q  ” 

Africa 

” ” 15 

World 

J5  5J  ^ »» 

(Less  than  half  of  the  population  is  “civilized”). 

[2] 


\\dUu-  k'jd  5 6 Hrl  ^Cu 


• 335:4 

' :::  : ; 

THE  RISE  AND  DECLINE  OF 
CHRISTIAN  CIVILIZATION 


The  masters  of  the  Western  World  are  rallying  their  forces 
to  the  defense  of  Christian  Civilization.  The  President  of  the 
United  States,  the  Pope,  and  the  British  King-Emperor  are  beat- 
ing the  war  drums  and  summoning  the  faithful  to  close  up  their 
ranks  and  fight  for  the  god  of  things  as  they  are. 

What  is  this  Christian  Civilization  of  which  we  hear  so  much? 
Whence  came  it?  Whither  is  it  going?  Is  it  worth  defending? 

Civilization  existed  before  Christianity.  The  answer  to  our 
question  about  the  nature  of  the  present  social  order  must  there- 
fore begin  with  some  comment  about  the  origin  and  development 
of  civilization. 

The  Rise  of  Civilization 


Early  men  probably  lived  in  small,  isolated  groups.  They  cen- 
tred their  activities  around  some  source  of  food.  Occasionally 
they  moved  in  search  of  a new  home;  but  when  they  had  found 
a satisfactory  living  place,  they  usually  stayed  until  they  were 
driven  out  by  the  forces  of  nature  or  by  other  men.  When  they 
had  learned  to  cultivate  land,  men  settled  in  village  groups,  built 
houses  and  lived  in  families. 

Trade  tied  separate  villages  together.  Traders  piled  up  wealth 
and  power.  The  civil  state  arose  as  the  political  expression  of 
trading  class  interests.  The  family,  the  tribe  and  the  village  were 
all  brought  under  the  civil  authority.  Pride  in  tribe  and  family 
gave  way  before  the  lust  for  riches.  Distant  lands  and  alien  peo- 
ples were  linked  in  a common  pursuit  of  profit. 

Civilization  is  the  period  of  history  that  is  dominated  by  civil 


[3] 


or  contractual  relations.  Blood  ties  hold  together  the  tribe,  the 
family,  and  to  a large  extent  the  village.  Business  contacts  prevail 
in  the  market.  When  the  village  pushes  farming  into  second 
place  and  takes  up  trade  as  its  chief  means  of  making  a living,  or, 
in  more  exact  terms,  when  traders  are  able  to  take  the  direction 
of  public  affairs  out  of  the  hands  of  landowners,  the  village  gives 
place  to  the  trading  city,  and  civil  society  or  civil-ization  is  born. 

The  change  from  agriculture  to  trade  usually  takes  genera- 
tions or  centuries.  In  the  Mississippi  Valley  it  was  over  in  less 
than  fifty  years.  When  the  change  is  completed  a self-contained 
agricultural-craft  economy  has  been  replaced  or  dominated  by  an 
expanding  business  economy. 

The  development  of  trade  is  important  because  it  provides  a 
new  means  of  livelihood  and  develops  new  social  forms.  The 
trader  is  not  a primary  producer.  He  does  not  hunt,  herd,  farm 
or  fabricate.  Instead,  he  takes  over  the  products  of  the  chase, 
the  farm  and  the  workshop,  markets  them  and  charges  a com- 
mission of  profit  for  his  services. 

Trade  yields  a better  living  than  hunting,  farming  or  hand- 
craft. The  trader  collects  goods,  fixes  prices,  uses  money,  extends 
credit.  When  he  begins  to  buy  labor-power  on  a big  scale,  to 
monopolize  resources,  to  accumulate  capital  and  to  control  and 
manipulate  prices  he  has  developed  modern  business,  which  is 
the  most  effective  means  of  enrichment  thus  far  devised  by  hu- 
man beings. 

The  earlier  traders  got  together  on  feast-days  or  at  fairs.  As 
time  passed,  a permanent  market  was  set  up  at  a river  mouth,  on 
an  island  or  beside  a good  harbor.  Every  day  is  market  day  and 
profit  day  for  the  trader  who  has  a shop  at  the  permanent  trade 
centre.  As  profits  pile  up,  docks  are  built,  warehouses  are  erected, 
a stream  of  goods  and  of  labor  power  flows  toward  the  perma- 
nent market,  and  the  trading  city  grows  in  wealth  and  power. 
This  permanent  market  is  the  economic  foundation  of  civilization. 

The  Characteristics  of  Civilization 

Civil  society,  built  up  around  the  permanent  trading  centre, 
has  developed  at  many  times  and  places  since  the  beginning  of 

[4] 


written  history.  It  is  the  type  of  social  life  with  which  the  western 
world  is  most  familiar.  It  is  neither  sacred  nor  immortal.  It  is 
merely  the  latest  of  the  many  social  forms  that  human  beings 
have  developed  in  their  age-long  climb  toward  wider  fields  of 
life,  liberty  and  happiness. 

Civilization  has  certain  features  that  distinguish  it  from  the 
earlier  forms  of  social  life.  The  first  characteristic  of  a trading 
society  is  the  permanent  market,  controlled  by  a class  that  makes 
its  living  from  trade.  The  farmer  and  the  craftsman  convert 
nature’s  stores  into  goods  ready  for  use.  They  consume  most  of 
these  goods  and  take  only  the  surplus  to  the  local  market.  The 
trader  relies  entirely  upon  the  market  for  his  profit.  Since  trade 
consists  of  buying  and  selling,  the  task  of  the  trader  is  to  find 
customers.  The  search  for  customers  begins  at  home.  Soon  it 
extends  to  foreign  territory, — to  other  villages,  cities,  countries. 
Finally  the  trader  goes  to  the  ends  of  the  earth  looking  for  profit- 
making opportunities.  The  farmer  and  the  craftsmen  rely  almost 
entirely  upon  home  consumption  and  the  home  market.  The 
trader  seeks  his  profit  in  wider  and  wider  territories  until  he  has 
established  a world  market. 

The  search  for  profit  takes  the  trader  in  several  different  direc- 
tions. He  seeks  foreign  customers  for  domestic  goods  and  home 
customers  for  foreign  goods.  He  must  secure  the  raw  materials 
needed  for  shipbuilding,  construction  and  manufacturing,  and  at 
the  same  time  maintain  a food  supply  sufficient  to  support  the 
populations  of  the  trading  city. 

The  development  of  trade  shifts  the  economic  centre  from  pro- 
duction of  goods  and  services  for  use  to  the  production  of  com- 
modities for  sale.  The  demands  of  trade  lead  producers  to  devote 
their  entire  time  and  energy  to  some  special  marketable  product. 
With  the  income  secured  from  the  sale  of  these  products,  they 
buy  the  necessaries  of  life  from  other  specialized  producers. 
Trade  economy  builds  a domestic  market  at  the  same  time  that 
it  builds  a foreign  one. 

The  farmer  and  village  craftsman  have  been  replaced  by  a 
manufacturer  who  produces  a volume  of  a special  line  of  com- 
modities that  he  believes  can  be  profitably  sold.  Production  for 

[5] 


use  is  replaced  by  production  for  profit.  Thus  a second  outstand- 
ing characteristic  of  civilization  appears, — commodity  produc- 
tion,— the  intervention  of  the  market  between  the  production  of 
goods  and  their  use. 

The  trading  class  must  have  the  tools  of  trade.  None  of  these 
tools  is  necessary  in  an  agricultural  economy.  They  are  indispen- 
sible  in  a trade  economy,  and  constitute  its  third  characteristic. 
They  include  permanent  markets  and  warehouses,  with  an  ac- 
cepted code  of  custom  or  law  governing  the  rights  and  duties 
of  traders;  established  trade  routes;  means  of  transport  such  as 
pack  animals  or  ships;  means  of  communication  such  as  an  al- 
phabet, writing,  printing,  the  postoffice;  a medium  of  exchange 
or  money  (commodity  money,  metallic  money  and  credit  is  the 
usual  sequence)  ; bookkeeping  and  accounting;  devices  for  chang- 
ing money,  for  commercial  borrowing  and  lending,  for  accepting 
and  discounting  bills  of  exchange  and  for  carrying  on  other  bank- 
ing functions.  When  all  of  these  tools  of  trade  have  been  devel- 
oped, the  trade  centre  differs  as  much  from  the  agricultural 
village  as  the  village  differs  from  a tribe  of  wandering  herdsmen. 

Expansion  is  a fourth  characteristic  of  a trading  society.  The 
interests  of  the  farmer  and  of  the  villager  lie  at  home — on  the 
farm,  in  the  village.  The  interests  of  the  trader  lie  abroad — in 
finding  new  customers  and  new  commodities  with  which  to  tempt 
and  satisfy  old  customers.  The  household  anchors  the  house- 
holder. Farmers  and  craftsmen  look  inward — to  the  farm  and  the 
shop  from  which  their  livelihood  comes.  Trade  detaches  the 
trader  from  any  particular  locality.  The  trader  looks  outward — 
to  the  caravan,  the  ship;  to  travel,  adventure,  discovery.  The 
search  for  Eastern  trade  led  Vasco  de  Gama  around  Africa  and 
Columbus  across  the  Atlantic.  The  agricultural  village  lives  with- 
in itself — static — century  after  century.  The  trading  city  is  press- 
ing ever  outward — expanding  into  new  fields  of  profit  making. 

The  village  with  its  self-sufficient  localism  has  been  replaced 
by  the  trading  city.  A new  source  of  livelihood  has  appeared, — 
business  for  profit.  The  farmer  and  the  village  craftsman  have 
been  replaced  by  the  trader,  the  manufacturer,  the  banker,  with 
their  increasing  flock  of  specialized  workers;  unskilled  and  skilled 

[6] 


wage-earners;  transport  workers;  clerks;  book-keepers;  lawyers. 
A new  economic  foundation  has  been  established  that  yields  a 
livelihood  for  a class  of  profiteers  or  business  men.  The  basis  of 
the  middle  class  has  been  broadened.  The  mass  working  class  has 
been  called  into  being. 

Village  property  consists  chiefly  of  land,  buildings,  implements 
and  animals.  These  means  of  production  were  used  by  the  house- 
holder to  feed,  clothe  and  house  his  family. 

Business  property  consists  chiefly  of  ships,  warehouses,  mines, 
factories,  commodities,  money.  All  are  employed  to  make  a 
profit  for  the  owner.  Civilization  thus  replaces  landed  property  by 
merchant  capital,  industrial  capital  and  bank  capital.  The  centre 
of  wealth  shifts  from  land  to  business;  and  a new  class  comes  to 
power — the  business  class,  which  is  a fifth  characteristic  of  a trad- 
ing society. 

The  object  of  the  business  class  is  the  acquisition  and  the 
accumulation  of  wealth.  This  is  the  sixth  characteristic  of  civiliza- 
tion. The  dominant  economic  group  in  every  civilized  commu- 
nity, the  business  class,  devotes  its  major  energies  to  the  piling 
up  of  profit  through  the  sale  of  consumption  goods,  the  purchase 
of  labor  power  and  the  investment  of  capital.  The  villager  is  also 
interested  in  the  accumulation  of  wealth,  but  in  the  form  of  land, 
buildings  and  animals  which  he  himself  uses.  The  craftsman  saves 
and  invests  in  his  combined  home  and  workshop,  in  tools  and  raw 
materials.  But  in  both  cases  the  margin  for  saving  is  small  and 
the  net  result  of  centuries  of  agricultural-craft  economy  is  little 
more  than  prosperous  well-kept  farms,  gardens,  craft  shops  and 
village  homes. 

The  case  is  far  different  with  the  trader.  His  chief  task  is  the 
accumulation  of  wealth  in  forms  that  can  be  used  for  further 
accumulation.  And  since  the  profits  of  trading  are  larger  than  the 
returns  from  hunting,  pillage,  farming  and  craftsmanship,  it 
comes  about  that  the  accumulations  of  wealth  in  the  trading  cen- 
tres are  greater  than  those  elsewhere.  In  the  course  of  time  the 
trade  centres  develop  into  centres  of  wealth  and  power,  and  the 
trading  city,  becomes  a synonym  for  wealth,  luxury,  refinement, 
parasitism,  profligacy.  A great  gulf  develops  between  village  and 

[7] 


city.  In  the  village  men  work,  and  take  or  send  the  products  of 
their  toil  to  the  cities.  In  the  city  men  bargain,  exchange,  specu- 
late and  live  lives  of  ease  and  comfort  on  the  commodities  pro- 
duced by  city  and  village  workers. 

The  chief  source  of  business  profit  is  exploitation, — the  seventh 
characteristic  of  civilization.  In  the  beginning  the  trader  bought 
goods  and  sold  them.  Very  soon,  however,  he  learned  that  the 
purchase  of  labor-power  is  the  ultimate  source  of  profit.  The  busi- 
ness man  then  became  a buyer  first  of  slaves,  then  of  serfs,  and 
finally  of  wage-labor.  So  long  as  a market  could  be  found  for  the 
commodities  produced  in  his  establishment,  the  more  labor  power 
he  could  purchase,  the  more  profit  he  could  make.  The  purchase 
of  labor  power  and  its  employment  in  profit-making  ventures  thus 
became  the  chief  source  of  business  profit. 

The  business  class,  having  secured  wealth  and  power,  is  con- 
fronted with  five  chief  tasks:  (1)  the  making  of  a profit  on  its 
investment;  (2)  the  enlargement  of  its  field  of  investment  and 
exploitation;  (3)  domination  over  class  rivals  at  home;  (4)  ex- 
tending and  stabilizing  its  control  over  dependent  foreign  terri- 
tory; and  (5)  carrying  on  the  struggle  for  supremacy  over  rival 
business  classes  abroad.  These  tasks  involve  rivalries,  contradic- 
tions and  conflicts.  In  order  to  win  out  in  the  conflicts,  the  busi- 
ness class  utilizes  the  state, — a bundle  of  legislative,  judicial  and 
administrative  institutions,  including  the  police  and  the  armed 
forces,  so  synchronized  and  directed  as  to  enable  the  dominant 
economic  class  to  triumph  over  its  enemies.  The  civil  state  is  the 
eighth,  and  one  of  the  most  distinctive,  characteristics  of  civil- 
ization. 

The  state  institutionalizes  conflict  and  makes  it  one  of  the 
major  objects  of  public  policy.  In  the  economic  field  the  prin- 
cipal task  of  the  business  class  is  the  struggle  for  profit.  In  the 
political  field  the  principal  task  is  the  struggle  for  power.  The 
economic  struggle  is  named  competition.  The  political  struggle 
is  called  war.  The  symbol  of  the  economic  struggle  is  the  market. 
The  symbol  of  the  political  struggle  is  the  professional  army  and 
navy.  The  maintenance  of  a professional  military  force  and  the 
waging  of  war  have  been  the  outstanding  political  features  of  the 

[8] 


civil  state  and  are  the  ninth  characteristic  of  civilization. 

The  tenth  characteristic  is  the  range  of  achievement  made  pos- 
sible by  the  great  accumulation  of  wealth  in  the  centres  of 
civilization.  These  achievements  may  be  grouped  under  four 
heads:  the  development  of  production  and  of  the  means  of  pro- 
duction ; the  science  of  organization  as  embodied  in  the  apparatus 
of  production,  transport,  exchange,  merchandizing  and  finance, 
in  the  professional  fighting  machine  (army  and  navy)  and  ini 
the  burocratic  apparatus  of  the  state;  the  subsidy  of  science,  re- 
search, invention ; and  the  emphasis  on  arts  and  letters.  The  eco- 
nomic and  military  achievements  are  indispensible  factors  in  the 
struggle  for  wealth  and  power.  Science  and  the  arts  are  the 
product  of  leisure  and  of  the  desire  of  all  ruling  classes  for  con- 
spicuous consumption. 

Civilization  may  therefore  be  described  as  the  stage  of  social 
history  beginning  with  the  foundation  of  the  permanent  market 
and  extending  to  the  present  day.  Its  outstanding  characteristics 
are  the  organization  of  a permanent  market;  the  specialized  pro- 
duction of  commodities  for  sale  in  the  market;  the  development 
of  the  tools  of  trade;  expansion;  the  dominance  of  a business 
class;  the  struggle  for  profit  as  a means  to  wealth  and  power; 
exploitation  as  a source  of  wealth;  the  state  apparatus;  war 
making;  and  the  wide  range  of  achievements  at  the  trade  centres. 
These  ten  characteristics  will  be  found  in  varying  degrees  at  all 
successful  centres  of  trade.  Their  development  is  usually  in  direct 
proportion  to  the  wealth  and  power  of  the  particular  trading 
class. 


The  Stages  of  Civilization 

Civilization  is  the  historic  stage  during  which  a permanent 
business  centre  is  dominated  by  a trading  or  business  class.  In 
the  course  of  their  development  trade  centres  pass  through  suc- 
cessive forms,  of  which  the  three  most  distinctive  are  the  trading 
city,  the  nation  and  the  empire.  The  era  of  civilization  may 
therefore  be  sub-divided  into  three  sub-stages;  cityism,  nationism 
and  empireism.  The  division  corresponds  roughly  with  the  ex- 

[9] 


panding  geographic  areas  brought  under  the  domination  of  a 
single  group  of  traders.  The  chief  characteristics  of  civil  society, 
as  listed  in  the  preceding  section,  appear  in  all  three  of  the  sub- 
stages of  civilization.  Their  relative  importance  varies  from  stage 
to  stage. 

The  trading  city  is  a local  territorial  unit  with  a permanent 
market  and  an  established  trading  class.  In  the  course  of  its  de- 
velopment this  trading  class  has  gained  control  of  city  policy.  The 
early  trading  cities,  among  the  Phoenicians  and  Greeks  for  ex- 
ample, had  a population  of  a few  thousand,  living  inside  the 
city  defenses.  The  early  Greek  cities  were  not  far  removed  from 
the  gentilic  form  of  organization  since  all  citizens  traced  their 
descent  from  common  ancestors.  Outside  the  defenses,  in  the 
nearby  countryside,  and  immediately  dependent  on  the  city,  lived 
the  herdsmen  and  land  workers  who  supplied  the  city  with  the 
bulk  of  its  food,  and  took  refuge  inside  the  city  when  military 
operations  drove  them  from  their  homes.  The  bulk  of  the  city’s 
economic  activity  took  place  within  its  own  immediate  territory, 
and  its  institutional  life  was  organized  for  the  defense  and  ex- 
pansion of  local  trading  class  interests. 

The  policy  of  the  trading  city  followed  definite  lines:  (1) 
Economic  and  political  expansion  of  its  own  profit-making  inter- 
ests. Such  a policy  involved  the  defeat  of  its  immediate  trade 
rivals,  the  conquest  and  subjugation  of  colonial  territory,  and  the 
establishment  of  trade  monopolies  within  certain  areas.  (2)  Al- 
liances and  leagues  formed  with  neighboring  trading  cities  for 
offensive  and  defensive  purposes.  The  early  Greek  city-states, 
the  Italian  cities  during  the  Middle  Ages,  and  the  Hanse  cities 
of  a slightly  later  period  are  examples,  first,  of  the  city  state; 
second,  of  the  formation  of  leagues  and  federations;  and  third, 
in  the  cases  of  Athens  and  Venice,  of  the  organization  of  em- 
pires built  up  by  the  trading  classes  of  those  cities.  Thus  a single 
city  like  Athens  passed  successively  from  a trading  city,  through 
membership  in  a league  of  trading  centres,  to  the  establishment 
of  colonies  and  the  conquest  and  exploitation  of  colonial  areas. 
In  such  a case  the  trading  city  became  an  empire  without  passing 
through  the  stage  of  nationhood,  in  the  modern  sense  of  that 
word. 


[10] 


The  formation  of  federations  or  leagues  of  trading  cities  led 
toward  a form  of  complex  nation  such  as  that  resulting  from  the 
federation  of  the  American  colonies  toward  the  close  of  the  18th 
century.  Some  of  the  earlier  leagues,  such  as  the  Hanse  League 
or  the  various  combinations  of  Italian  or  Netherland  trading 
cities,  dissolved  as  a result  of  internal  conflict  without  developing 
a national  organization. 

The  struggle  for  wealth  and  power  carried  on  between  the 
trading  classes  of  rival  cities  must  result : ( 1 ) in  the  destruction 
of  all  of  the  contestants;  or  (2)  in  the  supremacy  of  one  and  the 
destruction  or  subjugation  of  the  others;  or  (3)  in  a permanent 
unity  or  nationhood.  This  last  possibility  was  much  in  evidence 
during  the  nation-making  that  played  so  important  a role  in 
the  history  of  the  18th  and  19th  centuries. 

Frequently  a strong  central  government,  as  in  England  and 
France,  played  an  important  part  in  bringing  the  rival  factions 
into  a national  unity.  This  nation-making  process  was  the  logical 
result  of  the  struggle  for  supremacy  carried  on  among  the  rival 
trading  cities.  It  brought  into  existence  a territorial  area  which 
was  usually  larger  than  that  under  the  control  of  a single  city. 
Contending  trading  groups  entered  the  union  on  a basis  of  well- 
defined  equality.  A central  political  apparatus  was  set  up.  Eco- 
nomic interests  were  adjusted;  institutional  life  was  organized; 
efforts  were  made  to  establish  a common  language  and  common 
religious  practices;  and  through  various  channels  of  appeal,  a 
homogenous  population  was  built  up  with  a loyalty  or  patriotism 
which  had  the  nation  instead  of  the  city  as  its  objective. 

At  this  stage  in  the  development  of  civilization,  the  nation  is 
the  area  within  which  the  business  class  strives  to  organize  its 
profit-making  activities.  The  state  or  administrative  machine  is 
the  offensive  and  defensive  agency  which  it  uses  in  its  effort  to 
protect  and  extend  its  interests.  Specialization  and  departmental- 
ization in  government,  constitutions,  laws,  judicial  decisions  are 
all  means  through  which  the  ruling  class  attempts  to  make  the 
yoke  of  exploitation  less  irksome;  to  ease  domestic  class  con- 
flict, and  to  strengthen  its  hand  in  dealing  with  foreign  rivals. 

The  modern  nation  has  its  economic  background  in  a widely 

[in 


extended  area  based  on  the  new  means  of  transport  and  commu- 
nication, and  its  social  background  in  a predominant  and  well- 
organized  business  class.  In  earlier  times  the  absence  of  effective 
transport  and  communication  did  not  permit  the  organization 
of  large  administrative  areas,  and  the  employment  of  the  vast 
majority  of  the  population  in  food-getting  rendered  the  business 
class  relatively  less  dominant  than  they  have  been  in  recent  times. 
The  nation,  at  this  period,  seemed  to  be  little  more  than  a transi- 
tion stage  between  the  city  state  and  the  empire.  The  absence 
of  a basis  for  stable  national  existence  explains  the  reappearance 
of  city  states  during  the  process  of  imperial  disintegration.  The 
modern  parallel — the  disintegration  of  the  British  Empire — pre- 
sents an  essentially  different  picture.  The  British  Empire  is  break- 
ing up,  not  into  city  states — there  are  none  such — but  into  na- 
tions,— Canada,  Australia,  Ireland,  South  Africa,  Burma. 

The  trading  class  in  the  nation,  like  the  trading  class  in  the 
city,  follows  a policy  of  expansion  that  involves  economic  and 
political  wars  against  its  rivals;  forms  leagues  and  alliances;  con- 
quers territory;  colonizes;  defeats  rivals,  and  eventually,  if  it  is 
successful  in  the  survival  struggle,  establishes  an  empire  and  thus 
enters  the  third  and  highest  stage  in  the  development  of  civiliza- 
tion. The  empire  is  therefore  the  end  product  of  national  as  it  is 
of  city  organization.  In  both  cases,  the  successful  ruling  class 
organizes  foreign  exploitation  from  a centre  of  domestic  power. 
A few  trading  cities,  emerging  victorious  from  the  competitive 
struggle  with  their  rivals,  have  founded  empires.  During  historic 
times  the  successful  trading  nations  have,  almost  without  excep- 
tion, developed  imperial  organizations.  The  struggle  for  wealth 
and  power,  employing  the  instruments  of  trade,  diplomacy  and 
war  culminates  in  the  imperial  stage  of  civilization. 

The  essential  difference  between  cityism  and  nationism  on  the 
one  hand,  and  empireism  on  the  other,  is  not  necessarily  one  of 
size,  although  the  nation  usually  occupies  a greater  geographic 
area  than  the  city,  just  as  the  empire  usually  occupies  a larger 
geographic  area  than  the  nation.  The  trading  city  is  homoge- 
neous, both  as  to  its  citizenry  and  as  to  its  organization.  The  na- 
tion, composed  of  heterogeneous  population  elements,  is,  never- 

[12] 


theless,  homogeneous  as  to  territory.  The  empire  is  a heteroge- 
neous complex,  both  of  populations  and  of  territories.  The  cities 
of  London,  York  and  Dover  were  homogeneous  units.  The  United 
Kingdoms  of  England,  Scotland  and  Wales  were  homogeneous 
only  as  to  territory.  The  British  Empire  is  an  agglomeration  of 
peoples  and  territories. 

Trading  communities  that  have  reached  the  imperial  stage 
have  the  distinguishing  characteristics  of  civilization, — a perma- 
nent market,  specialized  commodity  production,  the  apparatus  of 
trade,  a policy  of  expansion,  a dominant  business  class,  the  strug- 
gle for  profit,  exploitation,  the  state  apparatus,  an  army  and 
navy,  wealth,  science  and  art  at  the  centre  of  imperial  power. 
The  geographic  area  included  under  the  control  of  the  imperial 
ruling  class  has  broadened  in  the  development  from  cityism  or 
nationism  to  empireism,  and  the  field  of  exploitation  has  been 
extended  to  include  dependent  or  colonial  peoples.  The  essential 
economic,  political  and  class  relations  persist. 

Like  other  social  forms,  the  empire  passes  through  successive 
phases  of  accumulation  and  dispersion  which  constitutes  a cul- 
ture cycle.  History  records  a number  of  imperial  cycles  of  which 
the  best  known  were  domiciled  in  the  Mediterranean  Basin.  The 
most  detailed  records  describe  the  latest  completed  imperial 
cycle, — that  centring  about  the  Roman  Empire,  from  600  B.C. 
to  450  A.D. 

Civilized  Empires 

The  historic  evidence  dealing  with  empires  may  be  generalized, 
without  doing  too  much  violence  to  the  facts,  as  a sequence  of 
stages.  These  stages  are  not  mutually  exclusive.  One  shades  into 
the  other.  A later  stage  overlays  its  predecessor  without  destroy- 
ing it. 

The  stages  of  the  imperial  cycle  may,  for  convenience,  be 
grouped  under  five  heads : ( 1 ) the  establishment  of  the  imperial 
nucleus  or  homeland;  (2)  expansion;  (3)  the  survival  conflict 
with  other  conquering  exploiting  groups;  (4)  world  supremacy, 
and  (5)  disintegration  and  dissolution.  All  exploiting  groups 

[13] 


which  contend  for  imperial  supremacy  pass  through  some  of 
these  stages.  Only  the  successful  ones  complete  the  cycle  from 
the  birth  of  an  empire  to  its  decay  and  death. 

The  imperial  nucleus  or  homeland  is  the  centre  around  which 
the  imperial  ruling  class  directs  the  exploitation  of  the  imperial 
territories.  This  stage  is,  in  one  sense,  pre-imperial  since  it  in- 
cludes the  development  of  the  trading  city  or  nation.  The  im- 
perial nucleus  is  more  than  a mere  trading  centre,  however.  It 
comprises  either  a federation  of  local  trading  centres  or  a con- 
solidation of  a number  of  trading  centres  under  one  dominant 
group.  The  imperial  homeland  is  the  base  of  operations  of  a class 
that  is  contending  for  imperial  supremacy.  It  must  possess  de- 
fence advantages,  a supply  of  raw  materials,  food  and  man 
power  sufficient  to  support  the  long  and  arduous  economic  and 
military  conflicts  that  are  the  essential  accompaniments  of  em- 
pire building.  Only  a very  few  geographic  areas  have  qualified  as 
bases  for  empire  building, — the  Nile  Valley,  the  Fertile  Crescent, 
Crete,  the  Italian  peninsula,  the  British  Isles.  The  ruling  class 
that  controls  such  a favorable  location  has  an  immense  advan- 
tage over  its  rivals  in  the  race  for  imperial  supremacy. 

The  trading  class,  in  its  advance  to  wealth  and  power,  follows 
a policy  of  expansion.  The  interests  of  the  traders  lie  outside  the 
homeland,  in  territory  which  they  visit  in  search  of  wares  and 
of  markets.  In  pursuit  of  these  interests,  the  trading  class  buys 
and  sells,  conquers,  subjugates,  colonizes,  exploits.  The  profes- 
sional military  apparatus  which  it  sets  up  helps  to  stabilize  its 
position  in  the  homeland  and  to  protect  and  extend  its  foreign 
interests.  The  sharp  conflict  of  interests  between  the  imperial  ex- 
ploiters and  their  colonial  victims  leads  to  boycotts,  movements 
of  national  liberation  and  finally  to  open  revolt.  Consequently 
the  imperialists  are  forced  to  maintain  large  military  units  in  all 
of  their  colonies  and  to  pay  the  costs  of  frequent  colonial  wars. 
The  imperial  ruling  class  that  succeeds  by  guile  or  by  force  in 
maintaining  its  control  over  its  colonies  gradually  rounds  out 
an  imperial  unit  consisting  of  an  organized  armed  homeland  and 
of  foreign  subjugated  areas.  ^ 

Expansion  takes  place  not  only  at  the  expense  of  colonial  peo- 

[14] 


pies.  It  also  involves  a survival  conflict  with  other  conquering, 
exploiting  groups,  which  are  attempting  to  extend  their  oppor- 
tunities for  profit-making  into  the  same  foreign  territories.  The 
struggle  is  in  part  economic— for  raw  materials,  trade,  and  in- 
vestments. Economic  rivals  also  conduct  war  as  a necessary  part 
of  their  survival  struggle.  Following  war,  the  defeated  empires 
are  dismembered  or  else  they  are  disarmed,  subjugated  and  forced 
to  pay  tribute.  Contestants  for  imperial  honofs  are  eliminated 
in  the  course  of  the  life-and-death  struggle  between  rival  em- 
pires, until  one  of  the  rivals  establishes  its  position  as  the  supreme 
exploiter  of  the  known  world. 

The  ruling  class  of  the  victorious  empire  asserts  its  supremacy 
by  imposing  its  law  and  order  upon  the  remainder  of  the  im- 
perial world.  The  objective  of  this  law  and  order  is  the  preserva- 
tion and  extension  of  ruling  class  power  and  profit.  Roads  are 
built  or  improved;  the  land  and  sea  are  policed;  commerce  is 
encouraged  and  protected;  money  is  stabilized;  long-term  con- 
tracts are  made  and  fulfilled;  rents  are  collected;  loans  are  paid; 
risks  and  interest  rates  are  reduced.  Wealth  is  concentrated  in  the 
imperial  centre  and  in  the  hands  of  the  imperial  ruling  class. 
The  world  is  divided  into  a relatively  small  tribute-collecting 
homeland  and  a vast  number  of  tribute-paying  protectorates,  de- 
pendencies and  colonies. 

The  empire  contains  within  itself  the  seeds  of  decay.  Built  on 
an  unstable  basis  of  expansion  in  the  competitive  struggle  for 
wealth  and  power,  it  is  continually  threatened  with  destruction 
by  the  internal  conflicts  which  the  form  of  organization  en- 
genders. The  city-concentrated  population  must  pay  for  im- 
ported food  and  raw  materials  either  by  exporting  manufactured 
products  or  else  by  plunder  and  the  levying  of  tribute  and  taxes 
on  their  neighbors  and  dependents.  City  construction  and  main- 
tenance are  a heavy  charge  upon  imperial  income.  Overhead 
increases;  a parasitic  class  develops;  the  military  machine  is  aug- 
mented; a burocracy  is  built  up.  Most  of  these  activities  are  non- 
productive. All  cost  more  in  outlay  than  they  yield  in  income  and 
thus  add  to  the  expense  of  running  the  empire.  Rising  costs  are 

[15.1 


met  by  new  plundering  expeditions  and  by  additional  taxes. 
Civil  wars  are  fought;  rival  factions  of  the  ruling  class  struggle 
for  power;  ambitious  generals  use  the  army  to  advance  their 
political  fortunes;  exploited  workers  and  landless  farmers  organ- 
ize and  rebel.  Foreign  wars  continue.  Additional  territory  is  con- 
quered; new  rivals  rise  to  threaten  the  world  empire;  migrating 
hordes  hurl  themselves  across  the  imperial  boundaries  toward 
the  accumulations  of  wealth  in  the  capital.  Colonial  exploitation 
is  intensified  to  meet  the  growing  imperial  deficits  and  to  satisfy 
the  wealth-hunger  of  the  ruling  class.  Local  centres  of  economic 
power  develop  in  the  colonies  and  demand  a place  in  the  sun. 
Colonial  revolt  becomes  more  frequent.  Some  of  the  stronger 
colonies  wrench  themselves  free  from  the  imperial  centre  and 
establish  their  independence.  Imperial  disintegration  progresses. 
Taxes  become  excessive;  agriculture  declines;  trade  decreases; 
industry  stagnates;  cities  are  depopulated;  centralized  production 
and  exchange  languish,  banditry  and  piracy  develop.  Credit  is 
restricted;  interest  rates  rise;  local  barter  economy  springs  up; 
autonomous  political  units  are  organized  and  armed.  The  empire 
breaks  up,  first  into  segments  struggling  for  power,  and  ultimately 
into  local  agrarian  units  with  their  occasional  trading  centres. 
The  imperial  cycle  ends  where  it  began,  at  the  level  of  the  agri- 
cultural village  with  its  craft  economy  and  minimum  of  trading 
activity. 

Civilization  is  the  sum  total  of  the  survival  struggles  between 
rival  trading  classes,  contending  for  supremacy  in  wealth  and 
power;  of  the  conflicts  between  owning  classes  and  exploited 
masses,  both  at  home  and  abroad;  of  the  civil  wars  and  wars  of 
conquest  and  survival;  of  the  division  of  the  world  into  auton- 
omous, competing  nations  and  empires.  Civilization  has  con- 
tinued from  the  dawn  of  written  history  to  the  present  time  and 
it  will  persist  until  it  is  replaced  by  an  alternative  social  system 
based  upon  cooperation  rather  than  competition  and  substituting 
for  the  struggle  for  wealth  and  power  between  rival  classes,  a 
socialized,  planned  world  economy  and  a world-wide  administra- 
tive apparatus. 


Christian  Civilization 


Christian  civilization  differs  only  in  name  from  the  pagan 
civilization  that  preceded  it.  The  same  economic  and  social  forms 
are  present.  The  same  practices  are  followed.  The  same  historic 
forces  are  at  work. 

The  era  of  Christian  Civilization  began  about  ten  centuries 
ago,  in  the  period  of  the  Crusades.  The  village  agriculture  of  the 
Dark  Ages  was  replaced  by  permanent  trading  centres.  The  trad- 
ers took  power  from  the  landowners,  established  centres  of  wealth, 
developed  commerce,  expanded  into  neighboring  territory,  con- 
quered colonies,  fought  wars,  monopolized  business  opportunities, 
bought  and  sold  slaves,  hired  wage-labor,  heaped  up  profits. 
Christian  civilization  saw  the  growth  first  of  city  states,  then  of 
nations,  and  finally  of  empires.  The  imperial  phase  of  the  era 
may  be  briefly  summarized: 

( 1 ) The  nuclei  of  imperial  power  were  established  in  Venice, 
Portugal,  Holland,  France  and  Great  Britain,  where  the 
trading  classes  gained  more  or  less  complete  control  of 
public  policy. 

(2)  Each  of  these  imperial  centres  expanded  at  the  expense 
of  backward  peoples  or  of  its  weaker  competitors  into  a 
colonial  empire. 

(3)  Venice,  Portugal,  Spain  and  Holland  were  successively 
dominant  between  1400  and  1700.  From  1713  to  1815 
France  and  Great  Britain  fought  a century-long  contest 
for  supremacy  that  ended  with  the  victory  of  the  British 
Empire. 

(4)  Britain,  as  the  victor  over  France  in  the  Napoleonic  Wars, 
was  the  supreme  world  empire  of  the  early  19th  century. 
In  trade,  commerce,  manufacturing,  money  and  finance; 
in  naval  power  and  political  control,  the  British  Empire 
was  mistress  of  the  planet. 

At  this  point,  however,  the  sequence  of  imperial  stages  was 
broken  by  an  event  unique  in  written  history, — machines  were 
built;  mechanical  power  was  harnessed;  the  new  technology  was 

[17] 


applied  to  manufacturing,  transport,  mining  and  agriculture,  and 
a system  of  trustified,  mechanical  mass-production  replaced  vil- 
lages, agriculture  and  handcraft  industry.  Machine  economy, 
developing  earliest  in  Great  Britain,  gave  that  country  an  im- 
mense advantage  over  her  chief  rival,  France.  The  same  machine 
processes,  however,  equipped  the  British  colonies  for  indepen- 
dence; raised  up  Germany,  Japan  and  the  United  States  as 
rivals  for  imperial  supremacy,  and  called  into  being  the  wage- 
working or  proletarian  class  that  was  destined  to  challenge  the 
entire  system  of  imperialism  by  launching  a drive  to  replace  the 
business  class  at  the  centre  of  power. 

Each  imperial  cycle  has  spread  its  culture  over  a wide  area. 
During  the  Egyptian  and  Roman  cycles,  the  culture  pattern  of 
the  imperial  centre  was  extended  to  territories  lying  in  or  near 
the  Mediterranean.  The  Roman  Empire  organized  trade,  built 
highways,  spread  its  language,  law  and  social  institutions  through 
large  sections  of  Europe  and  considerable  territories  in  Asia  and 
Africa.  The  diffusion  of  imperial  culture  stopped,  however,  at  the 
Sahara  Desert,  the  Atlantic,  the  Great  Plains  of  East  Europe  and 
other  natural  barriers.  It  has  remained  for  the  modern  empires 
to  diffuse  their  culture  over  the  entire  planet. 

Until  railroad,  steamboat,  motor  car,  airplane,  telegraph,  tele- 
phone and  radio  flooded  across  the  limitations  imposed  by  space 
and  time  upon  imperial  organization,  it  was  physically  impos- 
sible for  an  empire  in  Europe  to  dominate  territory  in  South 
Africa  and  Australia.  It  was  equally  impossible  to  domesticate 
the  great  land  masses  of  North  America,  Asia,  Africa  and  South 
America.  A culture  that  depended  upon  oxen,  horses  and  camels 
for  land  transport,  was  excluded  from  the  more  extended  con- 
tinental land  masses,  could  not  conquer  the  larger  oceans,  and 
was  confined  to  the  sea-coast,  to  river  valleys  and  to  the  adjacent 
continental  areas.  Steam,  electric  and  gasolene  transport,  coupled 
with  machine  tools  and  machine  weapons,  enabled  the  western 
empires  to  extend  their  control  into  central  continental  areas 
that  had  remained  closed  to  the  earlier  imperialists.  Not  only 
were  the  boundaries  of  the  empires  enlarged  rapidly  after  1870, 
but  missionaries,  the  movies,  photography,  printed  matter  and 

[18] 


other  forms  of  advertising,  plus  mass  production,  enabled  the 
imperialists  to  impose  their  culture  pattern  indirectly,  in  the  form 
of  consumption  goods  and  production  tools,  on  the  most  isolated 
communities.  So  it  came  about  that  in  a phenomenally  short 
time,  historically  speaking,  the  culture  pattern  developed  in 
Western  Europe  from  the  12th  to  the  15th  centuries,  was  ex- 
tended during  the  next  four  hundred  years  to  every  portion  of 
the  planet.  Even  where  Western  Europe  lost  political  control,  as 
in  the  United  States  of  North  America,  the  culture  pattern  of 
Christian  Civilization  was  adopted  and  diffused  with  immense 
enthusiasm  by  the  North  American  business  class,  in  its  own  right 
and  by  its  own  might. 

The  planet  has  been  drawn  together  by  technology.  At  the 
same  time  it  is  divided  into  nations  and  empires  under  the  direc- 
tion of  rival  ruling  class  groups  that  are  competing  for  wealth 
and  power.  These  rivalries  and  their  accompanying  conflicts  criss- 
cross the  planet  with  frontiers,  trade  barriers,  monetary  systems, 
police  regulations  and  fortifications.  During  peace  times  the  fron- 
tiers are  open  to  properly  accredited  individuals  and  to  specified 
commodities.  Periodically,  however,  war  is  declared,  the  frontiers 
are  closed,  and  the  leaders  of  rival  factions  or  of  rival  class  groups 
use  every  means  at  their  disposal  to  destroy,  maim  and  kill. 

The  19th  century  witnessed  the  maturing  of  the  chief  colonial 
areas  of  the  world  as  centres  of  industrial  production,  and  the 
fierce  struggle  for  economic  and  political  supremacy  from  1870 
to  1920.  The  20th  century  dawned  on  a series  of  colonial  revolts 
and  proletarian  revolutions  that,  together  with  the  war  of  the 
rival  empires,  shattered  the  structure  of  imperialism  and  brought 
to  a close  the  epoch  of  business  class  domination  of  public  policy 
that  has  characterized  successive  imperial  cycles  for  at  least  six 
thousand  years. 

A Social  System  in  its  Death  Agony 

During  the  opening  years  of  the  present  century,  the  social 
system  which  is  called  Christian  Civilization  began  to  break 
down.  It  had  lived  its  life  and  performed  its  historic  mission.  Its 

[19] 


period  of  growth  and  expansion  came  to  an  end.  The  destructive 
forces  engendered  by  the  competitive  struggle  for  wealth  and 
power  got  the  upper  hand.  Prosperity  was  swallowed  up  in  hard 
times.  Peace  was  banished  by  war.  Construction  gave  way  to 
disintegration. 

The  economic  crisis  that  broke  across  the  civilized  world  in 
1929  was  no  more  an  accident  than  the  devastating  War  of  1914 
was  a blunder.  The  masters  of  Christian  Civilization  did  every- 
thing in  their  power  to  perpetuate  prosperity.  They  made  every 
effort  to  avert  war.  From  the  First  Hague  Conference  in  1899 
to  the  catastrophe  of  1914  statesmen  worked  ceaselessly  to  pre- 
vent their  social  system  from  committing  suicide.  They  failed. 

Through  the  hectic  years  that  followed  the  War  of  1914  and 
the  economic  crash  of  1929,  the  masters  of  Christian  Civilization 
have  labored  to  re-establish  peace  and  restore  prosperity.  Their 
efforts  have  been  in  vain.  Wars  have  been  in  progress  in  one  or 
more  places  in  every  year  since  1910.  Unemployment  has  in- 
creased. Idle  capital  has  accumulated.  Inch  by  inch  the  paralysis 
of  death  has  crept  across  the  body  of  the  old  social  order. 

The  masters  of  the  Western  World  are  trying  to  prevent  an 
old  social  system  from  dying.  They  waste  their  time.  They  may 
as  well  join  King  Canute  on  the  seashore,  waving  back  the  tides. 
They  may  as  well  try  to  patch  an  old  coat  or  mend  an  old  shoe 
when  the  material  composing  it  has  begun  to  disintegrate.. 

Why  do  the  mighty  ones  strive  to  keep  life  in  the  old  out-worn 
body  of  Christian  Civilization?  For  one  simple  reason:  because 
it  has  made  them  mighty,  and  because,  like  most  human  beings 
who  enjoy  privileges  and  positions  of  authority,  they  hold  tena- 
ciously to  a dying  order  and  die  with  it. 

The  landlords  of  France  held  on  to  the  Feudal  system.  It  was 
womout,  broken  down.  Its  sagging  ruins  were  crushing  the  lives 
of  the  masses  and  obstructing  the  rise  of  the  oncoming  business 
class.  But  the  aristocracy  could  still  eat  the  cream  of  life.  To  the 
earnest  pleadings  of  their  advisers  that  they  get  out  of  the  path 
of  the  coming  disaster  before  it  was  too  late,  they  replied:  “After 
us  the  deluge,”  and  continued  to  eat,  drink  and  be  merry  until 
they  were  swept  into  oblivion. 


[20] 


The  landlords  and  capitalists  of  Russia  dammed  back  the  rising 
waters  of  social  change  until  the  flood  burst  its  banks  and  over- 
whelmed them.  They  would  not  listen  to  the  liberals.  They  shot 
down  the  masses  in  cold  blood  in  front  of  the  Winter  Palace. 
But  neither  their  obstinacy  nor  their  cruelty  could  avail.  They 
went  the  way  of  all  masters  who  try  to  perpetuate  a social  system 
beyond  the  span  of  its  historic  usefulness. 

Christian  Civilization  is  dying.  Its  monopoly  capitalist  economy 
and  its  bourgeois  democratic  state  are  being  gutted  from  within 
by  economic  disaster  and  smashed  from  without  by  war. 

Christian  Civilization  is  dying  by  its  own  hand,  wielding  those 
means  of  destruction  which  its  own  economy  and  polity  have 
produced.  It  is  also  being  wiped  out  by  the  action  of  millions 
whose  lives  have  been  made  intolerable  by  its  death  agonies.  The 
workers  and  farmers  of  Russia  repudiated  it  in  1917.  A year  later 
the  peoples  of  Germany  and  Austria-Hungary  made  an  abortive 
attempt  to  reject  it.  Totalitarianism  is  replacing  it  in  Europe. 
Neither  China  nor  India  has  adopted  Christian  Civilization  and 
neither  ever  will.  Forty-five  out  of  every  hundred  human  beings 
live  in  these  two  countries.  In  1910  Christian  Civilization  dom- 
inated the  planet.  Today  it  is  fighting  with  its  back  to  the  wall. 

A New  Day:  A New  World 

Each  tomorrow  of  history  is  a new  day.  As  Christian  Civiliza- 
tion passes  from  the  historic  scene  it  leaves  behind  the  machines, 
the  techniques  and  the  trained  man-power  needed  to  build  a 
new  social  order  that  will  be  as  superior  to  civilization  as  the 
culture  of  the  trading  centre  was  superior  to  that  of  the  agricul- 
tural village. 

The  success  with  which  techonolgy  has  been  spread  across  the 
planet  through  the  past  two  centuries  has  brought  mankind  with- 
in striking  distance  of  a world  commonwealth.  The  more  ad- 
vanced human  societies,  with  the  exception  of  the  Soviet  Union, 
are  today  living  at  the  culture  level  of  civilization.  To  gain  this 
level  they  passed  through  a long  process  of  social  evolution. 
Slavery  was  developed  on  a prodigious  scale,  as  in  the  Roman 

[21] 


world  and  in  the  early  history  of  American  colonization,  and  then 
repudiated  in  theory  and  abandoned  in  practice.  Science  and 
machine  technique  were  elevated  into  a position  of  supreme 
importance,  only  to  be  called  into  question,  during  recent  years, 
for  upsetting  the  social  equilibrium  by  the  drastic  changes  which 
they  have  inaugurated.  The  professional  military  apparatus  has 
been  lifted  to  a state  of  immense  efficiency  and  has  been  used 
repeatedly  with  terrible  effect  for  the  conquest  and  subjugation 
of  weaker  peoples;  for  the  suppression  of  revolt  against  ruling 
class  domination,  and  in  national  and  imperial  rivalries  that 
threaten  the  existence  of  both  victor  and  vanquished.  Property 
relations  have  undergone  extensive  changes  with  the  shift  from 
land  to  capital  as  the  centre  of  power,  and  from  small  business 
to  big  business  monopolies  as  the  agencies  of  profit  making.  The 
private  ownership  of  the  means  of  production;  exploitation  and 
the  class  struggle;  the  competitive  struggle  for  wealth  and  power 
between  rival  ruling  class  groups,  and  the  organization  of  the 
armed  state  have  survived  the  vicissitudes  in  the  life  of  civil- 
ization. 

The  human  race,  having  reached  the  culture  level  of  the  agri- 
cultural village,  might  conceivably  have  stopped  there  indefi- 
nitely, but  if  it  was  to  advance  from  the  meagre  economic  base 
and  the  narrow  social  area  of  village  localism  it  was  necessary 
to  utilize  social  forces  adequate  to  break  through  the  static  forms 
of  villagism  and  broaden  the  culture  pattern.  Otherwise  a com- 
munity might  remain,  as  in  parts  of  China  and  India,  for  centu- 
ries without  any  considerable  change  in  its  mode  of  life. 

War  was  always  a disturbing  factor,  but  of  itself  it  could  not 
provide  the  means  for  establishing  a new  culture  pattern.  Trade 
aimed  at  the  accumulation  of  profit  seems  to  have  been  the  more 
effective  stimulant,  since  it  generated  the  needed  motive-force 
to  break  up  the  hardened  pattern  of  villagism  and  lay  the  foun- 
dations for  a broader  culture.  Trade,  transport,  communication 
and  travel,  stimulated  and  facilitated  by  discoveries,  inventions, 
and  the  science  of  organization  brought  the  world  through  suc- 
cessive imperial  cycles  into  more  and  more  intimate  relations, 
until,  during  the  era  of  Christian  Civilization,  machine  tech- 

[22] 


nique  provided  the  means  for  establishing  a world  society. 

Each  historic  day  dawns  upon  a new  world.  History’s  yester- 
day held  the  human  race  within  the  confines  of  Christian  Civil- 
ization. Mankind  was  oppressed  by  its  exploitation,  harried  by 
its  poverty,  lacerated  and  bled  white  by  its  wars.  As  the  period  of 
Christian  Civilization  draws  to  a close,  so  terrible  is  the  destruc- 
tiveness of  its  death  agony  that  whole  generations  lie  exhausted 
and  broken,  a prey  to  hopelessness  and  despair. 

There  is  no  need  to  despair.  On  the  contrary,  there  is  every 
reason  for  hope.  Science  has  established  a wide  control  over  na- 
ture. Experience  is  showing  the  possibility  of  planning  and  build- 
ing a world  commonwealth  based  upon  peace,  abundance  and 
freedom  on  a scale  undreamed  of  in  an  earlier  age.  Christian 
Civilization  is  dying.  Let  it  die.  Shorten  its  agony. 

A new  world  order  is  being  born.  Ease  the  birthpangs.  Study 
its  characteristics.  Plan  and  guide  its  development.  Oppose  the 
forces  of  reaction.  Unite  with  all  those  men  and  women  of  vision, 
good  will  and  determination  who  are  striving  for  a cooperative, 
creative  world  society. 


Additional  copies  of  this  pamphlet  may  be  secured  from  P.  O. 
Box  338,  Ridgewood,  N.  J. 

Single  copy  10  cents,  postpaid 

10  copies  70  ” 

100  copies  $6.50 

• 3i7 


[23] 


BOOKS  ON  CIVILIZATION 


BARNES,  HARRY  E.  Intellectual  and  Cultural  History  of  the 
Western  World.  N.  Y. : Random  House  1937. 

BOISSONNADE,  P.  Life  and  Work  in  Medieval  Europe.  N.  Y. : 
Knopf  1927. 

BOSE,  PRAMATHA  N.  Epochs  of  Civilization.  Calcutta:  New- 
man 1913. 

BREASTED,  JAMES  H.  Ancient  Times.  N.  Y.:  Ginn  1916. 

CHAPOT,  VICTOR.  The  Roman  World.  N.  Y.:  Knopf  1928. 

COIT,  STANTON.  Is  Civilization  A Disease?  Boston:  Houghton 
Mifflin  1917. 

CUNNINGHAM,  W.  Western  Civilization.  Cambridge  1900. 
2 vols. 

GLOTZ,  GUSTAVE.  Ancient  Greece  at  Work.  N.  Y.:  Knopf 
1926. 

GOLDENWEISER,  A.  A.  Early  Civilization.  N.  Y.:  Knopf  1922. 

LOWIE,  ROBERT  H.  Are  We  Civilized?  N.  Y.:  Harcourt 
Brace  1929. 

NEARING,  SCOTT.  Where  is  Civilization  Going?  N.  Y.:  Van- 
guard 1927. 

PERRY,  WILLIAM  J.  The  Growth  of  Civilization.  London: 
Methuen  1924. 

PETRIE,  FLINDERS.  Revolutions  of  Civilization.  London: 
Harpers  1910. 

ROSTOVTZEV,  M.  I.  Social  and  Economic  History  of  the 
Roman  Empire.  Oxford:  Clarendon  1926. 

SCHNEIDER,  HERMANN.  The  History  of  World  Civilization. 
N.  Y. : Harcourt  Brace  1932.  2 vols. 

THORNDIKE,  LYNN.  A Short  History  of  Civilization.  N.  Y.: 
Crofts  1926. 

ZIMMERN,  ALFRED  E.  The  Greek  Commonwealth.  Oxford: 
Clarendon  1924. 


[24] 


FASCISM 


33s;  4_ 
>fl  7p 

no.| 


by  SCOTT  NEARING 


1750 


The  Historic  Role  of  Fascism 


1.  The  Liquidation  of  Imperial  Economy 


World 

Economy 

Imperial 

Economy 


National 

Economy 

Village 

Economy 


2.  Capitalism,  Imperialism,  Fascism  ^ 


1750 


1600 


1850 


1900 


1950 


World 

Economy 


Imperial 

Economy 


National 

Economy 

City 

Economy 


Village 

Economy 


3.  The  Major  Economic  Trend. 


500B.C.  o 500  1000  1500  20Q0A.D. 


CONTENTS 


FASCISM 


The  Fascist  Era 


I.  The  Middle  Class  Dilemma 

1.  The  rise  of  the  middle  class 

2.  Imperialism  decimates  the  middle  class 

3.  The  threat  of  middle  class  annihilation 


II.  The  Fascist  Program 

1.  Unite  the  propertied  and  privileged 

2.  Smash  the  proletarian  revolution 

3.  Organize  self-sufficient  nations 

4.  Establish  a strong  state 


III.  Fascism  in  Action 

1.  The  beginnings  of  fascism 

2.  The  fascist  road  to  power 

a.  The  fascist  organization 

b.  The  fascists  and  the  ruling  class 

c.  The  fascists  and  the  state 

d.  The  fascists  and  the  peasantry 

e.  The  fascists  and  the  wage-workers 

f.  The  fascists  and  the  proletarian  revolution 

3.  The  organization  of  fascist  society 

a.  Private  property  and  profit 

b.  Peasant  proprietorship 

c.  Class  collaboration 

d.  Syndicates  and  corporations 


6 


FASCISM 


e.  The  corporative  state 

f.  Fascism  and  the  church 

g.  Discipline  under  fascism 

4.  The  achievements  of  fascism 

IV.  The  Future  of  Fascism 

1.  Fascism  and  autarchy 

a.  The  nature  of  fascism 

A.  The  fascist  field  of  operation 

B.  The  revolutionary  role  of  fascism 

C.  The  philosophy  of  fascism 

D.  A working  definition 

b.  Economic  self-sufficiency 

2.  The  implications  of  autarchy 

a.  The  economic  implications  of  autarchy 

b.  The  political  implications  of  autarchy 

c.  How  far  can  autarchy  go? 

3.  The  historic  role  of  fascism 

a.  The  era  of  fascism 

b.  Back  to  the  Dark  Ages 

c.  An  historic  perspective 

4.  Fascism  or  Communism 


FASCISM 


The  Fascist  Era 

Capitalist  society  has  been  going  fascist  for  a decade.  With 
the  suppression  of  the  soviet  governments  in  Hungary  and 
Bavaria;  with  the  inauguration  of  the  white  terror  in  Finland, 
Poland  and  Spain,  and  with  the  triumphal  March  on  Rome, 
fascism  began  a general  offensive  that  has  been  extended 
to  all  parts  of  the  world.  Beyond  the  boundaries  of  the 
Soviet  Union,  the  fascists  have  won  most  of  the  class  con- 
flicts that  took  place  between  1918  and  1933. 

Fascist  forces  are  active  in  Asia,  the  Americas  and  Europe. 
They  help  to  shape  the  policies  of  Australia,  of  South  Africa, 
of  the  Irish  Free  State,  and  of  the  Indian  National  Congress. 
General  unrest  and  a widespread  feeling  of  uncertainty  have 
prepared  millions  of  North  Americans  to  follow  a fascist 
lead.  United  States  bankers  and  business  men  openly  ad- 
vocate a strong  government  on  the  Italian  model.  Fascist 
elements  have  been  prominent  in  the  recent  Latin  American 
wars  and  revolutions;  they  have  directed  the  official  govern- 
ment of  China  since  1927,  and  they  help  to  determine  Japa- 
nese policy.  Fascist  forces  are  increasingly  active  in  French 
politics,  and  the  National  Government  in  Great  Britain  has 
many  of  the  characteristics  of  a fascist  regime. 

The  most  spectacular  fascist  gains  have  been  made  in 
Central  Europe.  A dozen  years  ago  the  movement  was 
practically  unknown.  Today,  Finland,  Poland,  Hungary, 
Austria,  Czechoslovakia,  Jugoslavia  and  Roumania  are  under 
the  control  of  governments  which  are  dominated  by  the  same 
class  elements  that  support  fascism.  The  Nationalists  and 
National  Socialists  in  Germany  have  the  backing  of  two- 
fifths  of  the  voters.  The  Italian  Fascists,  after  a decade  of 
dictatorial  control,  boast  that  their  regime  will  last  a hundred 
years.  Through  the  Baltic  and  Balkan  states,  across  Ger- 


8 


FASCISM 


many  and  Austria,  and  to  the  tip  of  the  Italian  peninsula, 
stretches  a broad  belt  of  territory  in  which  fascism  is  the 
dominant  social  force. 

What  is  this  fascist  movement?  Whence  did  it  come? 
Why  has  it  spread  so  rapidly?  Where  is  it  leading?  The 
propertied,  and  the  privileged  are  asking  these  questions 
hopefully,  because  they  see  in  fascism  a possible  way  of 
escape  from  the  uncertainties  and  dangers  of  world  chaos. 
Members  of  the  working  class  ask  fearfully  because  they 
feel  that  fascism  will  only  multiply  their  difficulties  and  add 
to  the  certainty  of  war  and  starvation. 

Like  all  important  social  movements,  fascism  represents 
particular  class  interests.  Since  in  its  early  stages  it  draws 
its  support  largely  from  the  middle  class,  a study  of  fascism 
may  well  begin  with  an  examination  of  the  position  occu- 
pied by  that  class  in  the  years  immediately  preceding  the 
fascist  era. 

I.  THE  MIDDLE  CLASS  DILEMMA 

Through  more  than  a century  the  middle  class  had  been 
following  a road  laid  out  and  built  by  manufacturers,  bankers 
and  politicians.  At  every  turning  there  were  sign-boards 
which  read:  This  Way  to  Peace,  Progress  and  Prosperity. 
The  members  of  the  middle  class  had  such  confidence  in  their 
business  and  professional  leaders  that  they  asked  no  ques- 
tions and  followed  the  signs. 

The  paved  highway,  travelled  so  comfortably  during  the 
Victorian  Age,  became  a dirt  road.  The  road  became  a nar- 
row path.  The  sign  posts  disappeared.  Instead  of  reaching 
the  promised  paradise,  the  harried  travellers  found  them- 
selves in  a wilderness,  winding  along  the  face  of  a rugged 
mountain  chain.  From  above  they  were  threatened  by  loose 
boulders,  slides  and  avalanches:  the  trust  movement,  im- 
perialist war,  colonial  revolt,  rising  taxes  and  multiplying 
debts.  Below  them  yawned  the  precipice  of  proletarian 
revolution. 

1.  The  Rise  of  the  Middle  Class 

Trade  revolutionized  the  class  structure  of  agricultural 
society.  Trading  cities  filled  up  with  small  shop-keepers, 
manufacturers,  money  lenders,  jobbers,  contractors,  priests 
and  scholars.  It  was  in  these  centres  of  business  economy 
that  the  middle  class  first  organized  itself  effectively  and 


FASCISM 


9 


threw  down  the  gage  of  battle  to  the  landed  interests. 

The  growth  of  trade,  the  use  of  power  machinery,  the 
lending  and  borrowing  of  money,  the  development  of  science 
and  the  rise  of  educational  institutions  still  further  increased 
the  membership  of  the  middle  class  and  added  greatly  to  its 
income.  In  1750,  nine-tenths  of  the  population  of  western 
Europe  were  still  working  the  land.  A century  and  a half  of 
capitalist  development  has  so  transformed  western  European 
economy  that  in  present-day  Great  Britain  less  than  8 out  of 
each  100  are  engaged  in  farming,  forestry  and  fishing.  Today 
there  are  two  Europes:  one  is  agricultural;  the  other  is 
trading-manufacturing-banking. 

Countries  like  Poland  and  Bulgaria  are  typical  of  agricul- 
tural Europe.  In  Poland,  of  the  13,475,000  persons  gainfully 
employed,  762  in  each  1000  are  engaged  in  agriculture;  95 
in  industry  and  mining;  59  in  trade  and  commerce;  and  25 
are  in  public  service  and  the  professions.  The  situation  is 
much  the  same  in  Bulgaria  where  in  a gainfully  occupied 
population  of  3,049,000,  808  in  each  1000  are  in  agriculture; 
91  are  in  industry  and  mining;  41  are  in  trade  and  commerce; 
and  30  are  in  public  and  professional  service.  In  such  coun- 
tries agriculture  dominates,  with  three-quarters  or  four-fifths 
of  the  population  working  the  land. 

Great  Britain  and  Holland  are  typical  of  trading -manufac- 
turing-banking Europe.  Among  the  19,357,000  gainfully  oc- 
cupied Britons,  78  in  each  1000  are  engaged  in  agriculture; 
443  are  engaged  in  industry  and  mining:  272  are  engaged  in 
trade  and  commerce;  and  62  are  engaged  in  public  and  pro- 
fessional service.  The  proportions  for  Holland  are:  236  per 
1000  in  agriculture;  376  in  industry  and  mining;  214  in  trade 
and  commerce;  and  76  in  public  and  professional  service. 

All  of  those  engaged  in  industry,  trade,  and  commerce  are 
of  course  not  middle  class,  since  the  figures  include  the  wage- 
working masses.  But  among  the  men  and  women  listed 
under  these  occupations,  there  are  great  numbers  who,  in 
income,  social  position,  and  in  outlook,  rank  as  middle  class. 
The  magnitude  of  this  class  in  a modern  industrialized  coun- 
try is  shown  by  the  United  States  Census  of  Occupations. 

According  to  the  Census  of  1930,  the  48,828,000  gainfully 
occupied  persons  in  the  United  States  were  divided  as  fol- 
lows: 214  per  1000  in  agriculture;  309  in  industry  and  mining; 
204  in  transport  and  trade,  and  85  in  public  and  professional 


10  FASCISM 

service.  Four-fifths  of  United  States  economy  is  therefore 
non-agricultural. 

The  role  of  middle  class  elements  in  this  non-agricultural 
United  States  economy  bulks  large.  At  the  time  of  the  1930 
Census  there  were  6,081,000  engaged  in  trade,  including 

2.069.000  salesmen,  1,703,000  retail  dealers,  526,000  insurance 
and  real  estate  agents,  223,000  commercial  travellers,  and 

221.000  bankers.  There  were  3,253,000  professional  people, 
including  1,062,000  teachers,  226,000  technical  engineers, 

148.000  clergymen,  160,000  lawyers,  and  153,000  doctors. 
There  were  4,025,324  engaged  in  clerical  occupations.  In 
manufacturing  industries  alone  there  were  312,756  managers 
and  officials  and  338,504  foremen  and  overseers.  There  were 
65,162  operators,  managers,  officials  and  foremen  in  mining; 
and  343,385  owners,  operators,  officials,  managers  and  fore- 
men engaged  in  transportation.  Among  those  listed  in  do- 
mestic and  personal  service,  there  were  374,290  barbers  and 
hairdressers;  144,371  boarding-house  keepers;  56,848  hotel 
keepers  and  managers;  157,009  midwives  and  non-trained 
nurses;  165,406  restaurant  and  lunch-room  keepers,  beside 
officials  and  managers  of  laundries,  cleaning  and  dyeing  estab- 
lishments and  other  like  enterprises. 

These  are  some  of  the  most  obvious  of  the  occupational 
bases  for  the  middle  class.  The  3.5  million  owning  farmers; 
the  5.0  million  white-collar  workers  in  trade;  the  3.2  million 
professionals;  and  the  4.0  million  persons  in  clerical  occupa- 
tions, make  a total  of  15.7  million.  To  this  number  must 
be  added  the  managers  and  officials  in  manufacturing,  trans- 
port and  mining,  together  with  a considerable  number  of 
those  engaged  in  domestic  and  personal  service.  The  total 
of  middle  class  elements  thus  rises  to  at  least  18  million,  or 
nearly  two-fifths  of  the  48.8  million  who  are  gainfully  em- 
ployed. 

It  is  of  course  true  that  many  of  the  owning  farmers  are 
poor;  that  white-collar  workers  are  frequently  paid  less  than 
manual  laborers,  and  that  numbers  of  shop-keepers  and  pro- 
fessionals barely  make  a living.  On  the  other  side  of  the 
account,  however,  must  be  listed  the  very  large  number 
among  the  better  paid  wage-earners  who  own  their  homes, 
have  paid-up  insurance  policies  and  money  in  the  bank.  It 
seems  fair  to  conclude  that  at  least  a third  of  the  gainfully 
occupied  persons  in  the  United  States  can  be  catalogued  as 


FASCISM 


11 


middle  class.  They  have  preferred  occupations;  their  stan- 
dard of  living  includes  the  comforts  and  some  of  the  luxuries; 
they  own  substantial  amounts  of  property.  Any  serious 
change  in  the  social  order  would  therefore  endanger  the 
position  which  they  occupy  in  capitalist  society. 

2.  Imperialism  Decimates  the  Middle  Class 

The  competitive  economy  of  capitalism  in  its  early  stages 
was  a happy  hunting  ground  for  the  small  business  man. 
But  capitalist  economy  did  not  stay  competitive.  Instead, 
it  passed  quickly  into  the  monopoly  era. 

Cut-throat  competition  might  be  the  life  of  trade,  but  it 
was  the  death  of  profits.  Keen  business  men  soon  realized 
that  they  could  keep  a surer  grip  on  their  affairs  and  make 
a larger  volume  of  profit  if  they  consolidated  the  many  small 
competing  enterprises  into  a few  big  combines  or  trusts. 
Accumulating  surpluses  drove  business-for-profit  to  establish 
larger  and  larger  productive  units.  Technical  advances  pro- 
vided the  machinery  with  which  these  results  could  be 
achieved.  Then,  too,  in  the  course  of  the  competitive  strug- 
gle, the  victors  gobbled  up  the  vanquished  and  fattened  on 
their  markets.  So  the  trusts  advanced  at  the  expense  of  the 
small  manufacturers,  merchants  and  bankers. 

The  trust  movement,  however,  encountered  serious  ob- 
stacles. The  specialization  of  mass  production  compelled 
business  men  to  fight  harder  and  harder  for  the  available 
home  market.  As  the  volume  of  their  profits  grew,  the  mast- 
ers of  big  business  looked  farther  and  farther  afield  for  new 
and  paying  investments.  Since  most  of  the  capitalist  coun- 
tries, such  as  Great  Britain,  France  and  Japan,  were  very 
limited  in  size,  business  men  there  led  by  the  bankers  were 
soon  driven  to  seek  a large  share  of  their  profit  in  the 
foreign  field.  Thus  capitalism  passed  from  the  monopoly 
stage  to  the  imperialist  stage  which  began  in  earnest  after 
1870. 

Business-for-profit,  from  its  earliest  stages,  was  racked  and 
torn  by  economic  crises,  by  trade  wars,  by  colonial  revolts, 
and  by  the  struggle  of  the  wage  workers  for  better  working 
and  living  conditions.  During  the  imperialist  stage,  these 
disruptive  forces  reached  gigantic  proportions  in  the  dis- 
astrous business  crises  of  1893,  1907,  1911;  in  the  series  of 
wars  after  1898,  that  culminated  in  the  War  of  1914;  in 


12 


FASCISM 


world  wide  colonial  revolts,  and  in  the  working-class  revolu- 
tions between  1916  and  1923. 

The  War  of  1914  left  a trail  of  debts,  reparations,  and  other 
overhead  costs  that  led  to  a great  increase  in  taxes.  These 
heaped-up  tax  burdens  bore  with  particular  severity  on  the 
farmers,  householders  and  other  small  property  owners. 

The  attempts  between  1922  and  1929  to  rationalize  and 
stabilize  capitalist  economy  were  followed  by  the  catastrophic 
recession  of  1929-32.  The  position  of  the  farmer  was 
worsened  by  falling  prices;  thousands  of  small  business  men 
went  bankrupt;  bank  failures,  defaults,  and  the  deflation  of 
stock  and  land  values  wiped  out  savings;  salaries  were  cut; 
technicians  remained  workless  for  years;  professionals  lost 
their  clientele. 

The  system  of  profit  economy,  which,  during  its  period  of 
expansion,  had  played  so  important  a role  in  broadening  and 
enriching  the  middle  class,  now  in  its  period  of  decline, 
heaped  loss,  uncertainty  and  actual  want  upon  its  middle 
class  supporters.  The  business-for-profit  goddess  of  plenty 
had  become  a devouring,  mechanical,  burocratic  monster. 

3.  The  Threat  of  Middle  Class  Annihilation 

The  policies  folowed  by  trust  magnates  and  investment 
bankers  drove  the  middle  class  into  an  era  of  war,  ration- 
alization and  devastating  economic  crises  where  it  was  mer- 
cilessly plundered  and  decimated.  The  proletarian  revolu- 
tion went  a step  farther,  by  wiping  out  its  basic  means  of 
livelihood  and  destroying  its  most  cherished  institutions. 

The  proletarian  revolutionary  movement  was  fundamentally 
and  fatally  antagonistic  to  the  middle  class.  It  proposed  to 
socialize  land  and  other  agencies  of  production  and  thus  to 
destroy  those  forms  of  private  property  upon  which  a large 
part  of  the  middle  class  depended  for  its  income.  It  pro- 
posed to  honor  labor  and  to  outlaw  those  very  forms  of 
economic  parasitism  which  provided  the  “competence”  for 
which  all  middle  class  society  so  ardently  strove.  It  pro- 
posed to  abandon  “individualism”  in  economics  and  to  sub- 
stitute a central  economic  plan.  It  proposed  to  collectivize 
agriculture.  Once  this  program  was  put  into  efTect,  that 
portion  of  the  middle  class  which  depended  for  its  existence 
upon  property  and  privilege  would  be  destroyed. 

Where  the  proletarian  revolution  made  its  greatest  gains, 


FASCISM 


13 


in  the  Soviet  Union,  those  middle  class  elements  that  had 
depended  upon  privte  profit  for  their  livelihood  were  faced 
with  the  slogan;  work  or  starve.  There  were  temporary 
. concessions  under  the  New  Economic  Policy  of  1921,  and  for 
a time  it  looked  as  though  middle  class  elements  might  still 
survive  in  considerable  numbers  under  a proletarian  dictator- 
ship. But  with  the  inauguration  of  the  Five  Year  Plan  in 
1928,  and  of  the  campaign  for  the  rapid  collectivization  of 
agriculture  in  1929,  these  hopes  went  a-glimmering.  The 
triumph  of  the  proletarian  revolution  spelled  the  annihila- 
tion of  middle  class  economy. 

Thus  the  middle  class  was  brought  face  to  face  with  an 
ugly  dilemma  in  the  decade  that  followed  the  War  of  1914. 
On  one  side  were  the  insistent  demands  of  the  ruling  class 
for  rationalization  and  the  further  concentration  of  wealth 
and  of  economic  control  in  the  hands  of  a profiteering  few, 
with  the  inevitable  accompainment  of  deepening  conomic 
crises,  war,  colonial  revolt  and  growing  chaos.  On  the  other 
side  rose  the  mass  clamor  for  socialization  and  a working 
class  dictatorship  in  a he-that-will-not-work-neither-shall-he 
eat  society.  If  the  middle  class  followed  the  program  of  the 
imperialists  it  was  doomed  to  insecurity,  war-destruction  and 
devastation,  diminishing  profits,  bankruptcy  and  servitude. 
If  it  accepted  a working-class  dictatorship,  its  property  and 
its  privileges  would  alike  be  lost. 

II.  THE  FASCIST  PROGRAM 

The  harrassed  middle  class  elements  in  one  country  after 
another  have  adopted  programs  of  action  directed  in  part 
against  the  more  aggressive  phases  of  trust  economy,  im- 
perialism and  rationalization,  but  especially  against  the  forces 
of  the  proletarian  revolution.  They  were  also  driven  to 
seek  allies,  first  among  the  members  of  the  ruling  class,  and 
later  among  the  working  masses.  The  fascist  movement 
was  organized,  financed  and  supported  as  the  instrument  for 
executing  this  program. 

The  major  task  of  those  who  drew  up  the  fascist  program 
was  to  find  a middle  ground  between  trustification,  imperial 
expansion  and  rationalization  on  the  right,  and  a working 
class  revolution  on  the  left.  The  program  may  be  summed 
up  in  four  sentences:  Unite  the  propertied  and  privileged. 


14 


FASCISM 


Smash  the  proletarian  revolution.  Organize  self-sufficient 
nations.  Establish  a strong  state. 

1.  Unite  the  propertied  and  privileged 

Competing  conflicting  groups  among  the  propertied  and 
privileged  were  prepared  to  make  concessions  in  the  interest 
of  a united  front.  War,  economic  crises  and  proletarian 
revolution  had  driven  them  to  a realization  of  the  need  of 
some  form  of  united  action. 

Conflicts  remained  of  course.  The  landed  interests  de- 
manded a tariff  on  farm  products.  Industrialists,  eager  to 
reduce  costs,  were  urging  cheaper  food  as  a basis  for  further 
wage  cuts.  Exploiters  and  financiers  still  advocated  colonial 
expansion  as  a means  of  continued  mass  production.  The 
small  business  elements  sought  to  escape  the  devastations  of 
rationalization.  Professionals,  in  a period  of  revolution  and 
dictatorship,  insisted  upon  the  maintenance  of  free  speech 
and  press  and  other  institutions  of  liberalism.  But  among 
these  diverse  elements,  fascist  leadership  was  able  to  organize 
an  effective  united  front. 

2.  Smash  the  proletarian  revolution 

Once  a united  front  of  the  propertied  and  privileged  had 
been  organized,  the  immediate  task  was  the  liquidation  of 
the  proletarian  movement,  including  revolutionary  political 
parties;  the  trade  unions;  the  cooperatives;  the  working- 
class  newspapers;  the  defense  organizations;  the  semi-mili- 
tary units.  The  method  of  liquidation  was  a secondary  con- 
sideration. The  need  for  smashing  these  organizations  was 
conceded  by  all  of  the  propertied  elements. 

3.  Organize  self-sufficient  nations 

The  middle  class  elements  who  were  the  chief  backers  of 
fascism  proposed  to  preserve  their  property  and  their  privi- 
leges by  establishing  self-sufficient  economic  systems  within 
the  boundary  lines  of  each  nation  state.  The  success  of  a 
policy  of  economic  self-sufficiency  was  taken  for  granted  by 
the  fascists,  who  believed  that  given  land,  resources,  tools 
and  labor,  there  was  nothing  to  prevent  a closely  knit,  well- 
governed  state  from  charting  its  own  course  and  leading  a 
life  quite  independent  of  the  world  outside.  To  be  sure,  such 
a state  would  have  to  be  prepared  to  fight  for  its  right  to 
self-determination  and  self-sufficiency. 

The  program  for  national  self-sufficiency  includes  subsidies 


FASCISM 


15 


for  peasant  proprietors;  the  encouragement  of  working  hand- 
craftsmen,  and  protection  for  small  tradesmen.  It  also  calls 
for  the  nationalization  of  power,  railroads,  telephones  and 
other  public  utilities  which  are  essential  to  state  administra- 
tion and  national  defense.  Finally  in  developing  its  eco- 
nomic program,  the  self-sufficient  nation  is  compelled  to  con- 
trol foreign  trade.  By  decreasing  specialized  production  of 
commodities;  by  encouraging  local  and  largely  self-sufficient 
economic  activities;  by  nationalizing  the  key  industries  and 
by  controlling  foreign  trade,  the  self-sufficient  nation  will 
restrict  economic  activity  largely  within  its  own  borders. 

4.  Establish  a strong  state 

The  democratic  state,  governed  by  political  parties  repre- 
senting the  landed  interests  and  the  business  classes,  with 
new-hatched  labor  parties  putting  in  a word  here  and  there, 
could  not  hold  the  reins  of  power.  In  France,  Italy,  Ger- 
many and  other  countries,  ministries  followed  one  another 
in  and  out  of  office  in  an  endless  and  futile  procession.  They 
temporized.  They  compromised.  And  despite  their  prom- 
ises they  did  not  act.  For  this  vacillation  and  uncertainty, 
the  middle  class  saw  only  one  remedy, — a government  com- 
petent to  issue  mandates  and  to  enforce  them. 

A program  of  economic  self-sufficiency  was  meaningless 
unless  it  could  be  enforced.  The  menace  of  working-class 
revolution  and  the  uncertainty  and  chaos  of  the  post-war 
world  were  further  arguments  in  favor  of  a state  strong 
enough  to  maintain  law  and  order. 

III.  FASCISM  IN  ACTION 

The  fascist  program  offered  the  propertied  and  privileged 
a way  of  escape  from  threatening  disaster.  During  the  past 
decade  the  advocates  of  this  program  have  organized  their 
followers,  seized  power  and  have  established  units  of  fascist 
society. 

1.  The  Beginnings  of  Fascism 

Fascism  had  its  beginnings  long  before  the  War  of  1914. 
Theorists  trace  its  origins  in  the  writings  of  Saint  Simon, 
of  List,  of  Sorel  and  of  the  syndicalists  whose  ideas  gained 
such  widespread  support  in  Italy,  Spain  and  Latin  America, 
Syndicalism  is  a theoretical  near-neighbor  to  fascism,  involv- 
ing a form  of  society  akin  to  the  corporative  state  of  the 
Italian  Fascists. 


16 


FASCISM 


Pre-war  fascist  tendencies  were  not  confined  to  the  theo- 
retical field.  In  many  directions  they  took  concrete  social 
form.  During  the  closing  years  of  the  nineteenth  century, 
when  the  trust  movement  was  making  such  rapid  gains  and 
when  imperialism  was  sweeping  across  the  world,  opposition 
from  several  different  quarters  followed  the  general  fascist 
line.  First  there  were  the  nationalist  movements  in  the  Bal- 
kans, in  the  Near  East,  in  Latin  America,  in  Ireland,  in 
India,  and  in  China,  which  sought  liberation  from  imperial 
control.  Within  each  of  the  imperial  countries  the  small 
tradesmen  and  professionals  organized  their  “liberal”  or 
middle  class  parties  to  fight  the  growing  menace  of  big 
business.  Closely  associated  with  this  movement  of  the  city 
middle  class  elements  against  the  big  business  policy  of 
trustification  and  imperial  expansion,  was  the  movement  of 
the  small  farmers  to  preserve  agriculture  against  hight  taxes, 
high  freight  rates,  and  ruinously  low  prices  of  agricultural 
products.  These  movement  were  sporadic  and  local  until 
the  magnitude  of  the  danger  forced  the  propertied  and  privi- 
leged into  a working  alliance. 

2.  The  Fascist  Road  to  Power 

The  white  heat  of  war  and  revolution  fused  the  divergent 
middle  class  elements  and  the  more  aggressive  elements  of 
the  ruling  class  into  a propertied-privileged  united  front 
which  carried  the  banner  of  fascism  to  victory.  The  main 
body  of  fascist  support  has  been  drawn  in  every  instance 
from  middle  class  elements.  The  leadership  has  been  divided 
between  the  middle  class  and  the  ruling  class. 

In  Italy,  writes  Bernhard  (Der  Staatsgedanke  des  Fasch- 
ismus,  p.  12),  “The  confederates  with  whom  Mussolini  seized 
power,  were,  in  the  main,  sons  of  the  lower  middle  class,” 
specifically  craftsmen,  small  tradesmen  and  minor  govern- 
ment officials.  Schneider  and  Clough  write  in  the  same  con- 
nection: “When  Fascism  first  appeared  on  the  scene  the 
lower  middle  classes  were  the  most  active  and  patriotic  sup- 
porters of  the  cause.  The  unexpected  violence  of  the  labor 
crisis  of  1919-20  so  frightened  shopkeepers,  small  factory- 
owners,  and  business  men  whose  financial  position  was  none 
too  secure  that  they  joined  the  movement  in  haste  and  con- 
tributed liberally,  even  frantically,  to  the  fasci.”  (Making 


FASCISM  17 

Fascists,  p.  14).  Membership  in  the  Italian  Fascist  Party 
in  November  1921  was  distributed  as  follows: 

Business  men  . 9 per  cent 

Industrialists  . 3 ” ” 

Professional  men  7 ” ” 

Public  employees  5 ” ” 

Private  office  workers  10  ” ” 

Teachers  1 ” ” 

Students  13  ” ” 

Industrial  workers  16  ” ” 

Agricultural  workers  ....... 24  ” ” 

Landowners  and  tenant  farmers  12  ” ” 


(Schneider  and  Clough,  Making  Fascists,  p.  3).  The  Italian 
movement  “took  the  form  of  an  ‘independent’  organization 
of  the  middle  classes  with  a radical,  typical  bourgeois  pro- 
gramme, capable  of  satisfying  the  mobilized  youth  and  the 
broad  masses  of  the  middle  classes  by  its  simultaneous  pro- 
clamation of  a struggle  both  against  capitalism  and  against 
the  proletariat.”  (Grieco,  Communist  International,  Dec.  15, 
1928,  pp.  42-43). 

As  the  fascists  moved  toward  power,  their  attacks  on  the 
big  capitalists  grew  less  severe.  Their  chief  agencies  of 
struggle  were  “patriotic  militant  organisations  which  terror- 
ized first  the  agricultural  workers  in  the  countryside  and 
then  the  revolutionary  proletariat  in  the  towns.”  (Martinov, 
Communist  International,  vol.  vii,  no.  2-3,  p.  72). 

The  fascist  seizure  of  power  was  greatly  facilitated  by  the 
fact  that,  with  minor  exceptions,  such  as  Soviet  Bavaria  and 
Bolshevik  Hungary,  much  of  the  economic  and  political  ma- 
chinery was  already  in  the  hands  of  fascist  supporters,  who 
owned  property,  held  important  jobs,  dominated  and  in  many 
respects  controlled  the  technical  and  professional  fields.  If, 
as  is  almost  always  the  case,  these  key  positions  include 
important  posts  in  the  army  and  navy,  the  war  and  naval 
ministries,  the  post,  telegraph  and  other  agencies  which  are 
likely  to  be  determining  factors  in  a revolutionary  situation, 
the  fascists  merely  proclaim  the  possession  of  that  which  they 
already  occupy. 

Fascism  aims  to  perpetuate  such  basic  institutions  as  pri- 
vate property;  individual  enterprise;  small  scale  farming  and 
trading;  the  church;  and  the  political  state.  Since  most 


18 


FASCISM 


property  and  privilege  are  based  on  one  or  more  of  these 
institutions,  the  fascists  in  bidding  for  power,  can  promise 
security  to  the  well-to-do  and  also  to  those  workers  who  hold 
a position  above  the  level  of  bare  subsistence. 

Such  a situation  eases  the  struggle  for  power.  The  fascist 
movement,  through  its  control  of  so  many  strategic  positions, 
expropriates  fewer  individuals  and  makes  fewer  enemies  than 
would  the  proletarian  movement  under  similar  circumstances. 
Even  where  it  employs  direct  action,  fascism  respects  and 
defends  most  of  the  existing  institutions. 

a.  The  fascist  organization 

Since  the  fascists  propose  to  seize  power,  they  begin  by^ 
organizing  a fighting  force.  “The  original  and  predominating 
organizational  form  of  fascism  is  the  militarist  league  . . . 
In  Germany,  as  in  Italy,  the  militarist-fascist  organisations 
were  formed  expressly  for  the  struggle  to  crush  the  revolu- 
tionary movement  of  the  working  class.”  (Alfred,  Communist 
International,  May  1,  1931,  p.  247).  Politics  with  the  Italian 
Fascists  was  a secondary  activity.  Two  years  elapsed  before 
they  made  even  a pretense  of  contesting  elections.  Local 
fascist  groups  terrorized  the  leaders  of  the  labor  movement; 
attacked  trade  union  houses;  smashed  labor  presses  and  thus, 
in  individual  local  combats,  cleared  the  ground  of  their  im- 
mediate enemies.  The  battle  at  the  polls  came  later — after 
this  preliminary  work  of  destroying  revolutionary  organiza- 
tions had  been  well  advanced. 

The  fascist  movement  did  not  begin  among  the  masses,  or 
even  among  the  rank  and  file  of  the  middle  class.  Rather  it 
has  had  its  origin  in  the  conspiratorial  activities  of  a few 
adventurers  and  soldiers  of  fortune. 

Fascists  scoff  at  the  voice-of-the-people  slogans  of  the 
democrats.  They  see  the  masses  as  potential  followers  to 
be  won  over  and  led  by  the  “elite,” — in  other  words,  by  the 
fascists.  Democracy  they  describe  as  a “rotting  corpse”  or 
a “decaying  carcass”  to  be  replaced  at  the  earliest  opportunity 
by  the  more  vital  institutions  of  fascism. 

Fascists  have  built  a state  within  the  state.  In  the  name 
of  patriotic  necessity  they  have  established  their  own  rules; 
maintained  their  own  discipline;  crushed  their  enemies  with 
armed  force,  and  have  won  power  by  the  use  of  guns.  To 
achieve  such  results,  the  fascist  organized  a mobile  force  of 


FASCISM 


19 


men  who  did  not  hesitate  to  kill  when  killing  was  necessary. 
Organizationally,  therefore,  fascism  was  built  around  an 
army  rather  than  a political  party.  The  fascists  began  their 
campaign  not  by  an  oratorical  appeal  to  the  masses,  but  by 
burning  the  meeting  places,  wrecking  printing  presses  and 
shooting  the  leaders  of  their  only  real  opponent — the  work- 
ing-class revolutionary  movement. 

Since  the  fascists  centered  their  attention  on  combat,  their 
organizations  took  on  a military  character.  They  built  their 
general  staffs  largely  of  men  who  had  directed  the  battles 
of  the  War  of  1914,  and  exalted  their  leaders  to  positions  of 
personal  dictatorship  typical  of  most  military  organizations. 

Fascist  propaganda  is  nationalistic  and  loyalistic.  Fascists 
do  not  rely  upon  argument.  Instead  they  make  direct  emo- 
tional appeals  for  the  support  of  God  and  Country.  No  real 
effort  has  been  made  by  the  fascists  to  establish  an  interna- 
tional organization.  Indeed,  fascism  is  avowedly  opposed 
to  internationalism.  It  builds  with  the  nation  as  the  supreme 
unit. 

b.  The  fascists  and  the  ruling  class 

The  fascist  attacks  upon  the  revolutionary  movement  lined 
up  fascism  and  big  business  on  the  same  side  of  the  class- 
war  fence.  Business  interests  have  helped  to  finance  the 
fascist  movement,  and  many  of  the  sons  and  grandsons  of  big 
business  men  together  with  the  younger  generation  of  the 
large  landowners  joined  the  Black  Shirts  in  Italy  and  the 
Brown  Shirts  in  Germany.  The  fascist  organization  offered 
a fighting  arm  to  a bankrupt  and  harrassed  capitalism,  none 
too  sure  in  many  cases  of  the  police  and  armed  forces.  Con- 
sequently, the  business  interests  provided  the  fascist  move- 
ment with  funds  and  assisted  it  to  attack  working  class 
organizations. 

Fascist  leaders  often  denounced  the  conduct  of  particular 
administrative  officials  and  particular  ruling  class  institu- 
tions, and  in  the  early  stages  of  the  movement  challenged 
ruling  class  power.  Goebbels,  leader  of  the  Hitler  forces 
in  Berlin,  used  this  strong  language  in  The  Nazi-Sozi:  “When 
we  have  the  masses — what  then?  We  shall  grit  our  teeth  and 
prepare;  we  shall  march  against  this  government.  . . . From 
revolution  in  words  we  will  go  to  revolution  in  deeds.  We 
shall  make  a revolution,  chase  Parliament  to  hell  and  found 


20 


FASCISM 


the  State  on  the  might  of  German  fists  and  German  heads.” 
Mussolini,  in  a declaration  of  November  17,  1922,  warned 
Italian  big  business  that  it  must  end  abuses. 

With  the  seizure  of  power  however,  comes  a profound 
change  in  the  fascist  attitude.  The  demagogic  appeal  to  the 
masses  ends.  Bankers  and  profiteers  entered  the  Mussolini 
cabinet.  In  the  spring  of  1925,  when  his  Minister  of  Finances, 
De  Stefani,  imposed  restrictions  on  currency  speculation, 
Mussolini  went  to  the  rescue  of  the  bankers  and  brokers  and 
rescinded  the  restrictions.  Big  business  is  safer  in  Italy 
under  fascism  than  it  was  before  the  March  on  Rome. 

A corresponding  change  takes  place  in  the  structure  of 
the  Fascist  organization.  Secondino  Tranquilli  traces  this 
change  in  careful  detail  in  the  Kommunistische  Internationale 
for  April  18,  1928.  The  middle  class  elements  become  less 
important.  The  Fascist  government  frankly  champions  the 
cause  of  big  business. 

The  Fascist  movements  of  Germany  and  Italy  have  se- 
cured important  contributions  from  big  business  interests;. 
From  August  1920  when  his  paper,  the  Popolo  dTtalia,  waged 
its  war  against  bolshevism,  Mussolini  was  in  close  touch 
with  the  Italian  General  Confederation  of  Industry,  the  prin- 
cipal organization  of  Italian  big  business.  The  big  industrial- 
ists were  slow  to  welcome  fascism,  but  they  “wTere  its  main- 
stay (financially)  during  the  critical  years  of  1921  to  1924/’ 
(Schneider  and  Clough,  Making  Fascists,  p.  14). 

Reupke  in  his  Wirtschaftssystem  des  Faschismus^  (p.  39) 
points  out  that  while  between  big  business  and  fascism  there 
were  many  inner  contradictions,  nevertheless,  business  ac- 
cepted fascism  as  its  only  effective  means  of  crushing  the 
proletarian  revolution  and  disciplining  labor.  Clara  Zetkin 
stated  the  case  forcefully  in  the  Labour  Monthly  for  August, 
1923. 

Italian  Fascism  has  made  another  important  bid  for  big 
business  support.  Mussolini  offers  to  the  Italian  employers 
" '‘something  possessed  by  no  system  of  private  industry  any- 
where in  the  world:  absolute  security  against  strikes  and 
against  the  sabotage  which  at  earlier  times  has  been  so  wide- 
spread in  Italy.  Today  private  employers  in  Italy  can  pile 
up  costly  machinery,  lay  in  stocks  of  valuable  materials;  no 
one  will  damage  them,  no  one  will  endanger  their  usefulness 
by  cla^s  struggle,  no  one  will  attack  the  security  of  private 


I 


FASCISM 


21 


property.  The  industrialists  today  can  count  surely  in  their 
calculations  upon  freedom  from  strikes.  Mussolini  puts  his 
whole  power  behind  this  fact.  In  hindering  strikes  he  sees 
the  real  test  of  the  true  possibilities  of  fascism.”  (Bernhard, 
Der  Staatsgedanke  des  Faschismus,  p.  36). 

The  contrast  between  the  attitude  of  fascists  and  of  bol- 
shevists  toward  capitalism  is  thus  stated  by  Pennachio  in 
The  Corporative  State  (pp.  16-17).  “Fascism  accepts  the 
reality  of  the  social  division  of  men  into  classes  and  wishes 
only  to  change  their  organization  and  to  modify  and  clarify 
their  rights  and  their  duties  to  the  nation.  Bolshevism  wish- 
es to  destroy  the  social  classes  solely  for  the  purpose  of  im- 
posing the  dictatorship  of  a single  class,  the  proletariat.  All 
this  goes  to  show  the  chasm  that  separates  the  two  revolu- 
tions and  illustrates  the  broad  basis  on  which  the  Fascist 
regime  has  been  built.” 


c.  The  fascists  and  the  state 
The  fascists  seek  to  organize  a national  state  strong 
enough  to  stand  above  all  individuals,  and  above  all  class 
and  sectional  interests.  This  sovereign  state  would  determine 
its  foreign  policy  solely  with  a view  to  the  advancement  of 
its  own  interests. 


Fascism  roundly  denounces  bourgeois  democracy.  It  de- 
nies the  capacity  of  the  masses  to  decide  critical  political 
issues  and  proposes  the  organization  of  a strong  state,  led 
by  the  elite.  Mussolini  wrote  on  this  point!  “Fascism  denies 
that  numbers,  frofh  the  mere  fact  of  being  numbers,  can 
play  the  role  of  leaders  of  human  communities.  Fascism 
denies  that  numbers  can  govern,  through  a system  of  period- 
ical consultation  of  the  electorate.”  (N.  Y. XilS^s,  Sept.  18, 

1932), 

The  fascist  state  is  described  by  Mussolini  in  the  same 
article  as  “something  absolute,  before  which  individuals  and 
groups  are  something  relative.  Individuals  and  groups  are 
conceivable  only  inasmuch  as  they  exist  within  the  state:” 
Rocco  carries  this  idea  to  its  logical  conclusion:  “For  fascism, 
society  is  the  end  and  the  individual  the  means.” 

Prof.  Gentile,  one  of  the  leading  fascist  theoreticians,  states 
the  fascist  position  on  the  State  in  these  words:  “Both  Fas- 
cism and  Nationalism  regard  the  State  as  the  foundation  of 
all  rights  and  the  source  of  all  values  in  the  individuals  com- 


22 


FASCISM 


posing  it.  For  the  one  as  for  the  other,  the  state  is  not  a 
consequence — it  is  a principle.  ...  In  the  case  of  Fascism, 
State  and  individual  are  one  and  the  same  things,  or  rather, 
they  are  inseparable  terms  of  a necessary  synthesis.”  (The 
Philosophic  Basis  of  Fascism,  in  Foreign  Affairs,  vol.  6,  pp. 
301-2).  Hence  Mussolini’s  fiat:  “Beyond  (outside  of)  the 
State — nothing!”  * 

The  fascist  state  is  not  merely  supreme.  It  is  the  highest 
form  of  social  organization.  Gentile  describes  the  fascist 
state  as  “a  wholly  spiritual  creation.”  An  Irish  enthusiast 
conceives  of  the  state  as  “a  physical  body  prepared  for  the 
incarnation  of  the  soul  of  a race.”  The  race  fulfils  its  his- 
toric mission  through  the  instrumentality  of  this  state. 

A German  student  of  fascist  theory  sums  up  the  matter 
thus:  “A  state  must  be  produced  which  considers  the  in- 
dividual cells  as  elements  of  the  state  and  which  guarantees 
the  functioning  of  this  unitary  state.”  (Bernhard,  Der  Staats- 
gedanke  des  Faschismus,  p.  11). 

Where  fascism  has  had  its  largest  opportunity, — in  Italy, — 
it  has  practically  wiped  out  parliamentary  democracy.  The 
Italian  Parliament  is  shorn  of  its  powers.  In  its  place  is 
the  General  Council  of  the  Fascist  Party,  which  is  the  real 
legislative  and  executive  organ. 

Under  the  Electoral  Law  of  1928,  each  of  the  thirteen 
national  confederations  sends  in  its  alloted  quota  of  the  800 
names  that  are  submitted  to  the  Grand  Council  of  the  Fascist 
Party.  Four  hundred  of  these  800  names,  selected  by  the 
Grand  Council  in  consultation  with  the  Ministry  of  Corpora- 
tions, constitute  the  “official  list”  of  candidates  to  be  voted 
on  by  the  members  of  all  syndicates.  The  four  hundred 
names  must  be  approved  as  a unit.  If  they  are  approved  they 
constitute  the  new  Parliament.  If  they  are  rejected,  a new 
list. of  candidates  must  be  compiled.  The  Fascist  Party, 
composed  theoretically  of  the  elite  of  Italy,  is  thus  the  real 
governing  body  of  the  nation.  And  since  membership  in  the 
Party  is  rigidly  restricted,  the  great  mass  of  the  Italian 
people  are  subject  to  a political  regime  in  whose  conduct 
they  have  no  direct  voice. 

d.  The  fascists  and  the  peasantry 

Peasant  labor  and  village  handcrafts  are  encouraged  by 
fascist  leadership  as  the  soundest  nucleus  for  a self-suffi- 


FASCISM 


23 


cient  economy.  These  elements  are  an  important  factor  in 
the  present-day  life  of  Central  Europe.  They  can  therefore 
be  readily  utilized  as  a mass  basis  of  fascist  support. 

Italian  Fascism  has  insisted  upon  a peasant  foundation  for 
its  economy.  When  the  Italian  Fascists  seized  power,  Italy 
was  importing  2.7  million  tons  of  grain  per  year.  Against 
this  grain-import  drain  Mussolini  directed  “the  battle  of 
wheat”,  granting  subsidies  and  loans,  and  encouraging  a pro- 
gram of  land  reclamation  to  provide  the  necessary  additions 
to  wheat  acreage.  Bonomi  points  out  that  “it  is  above  all 
in  the  small  rural  property  owner  and  in  the  artisans  of  the 
towns”  that  fascism  will  find  its  strongest  support.  “There 
remain  to  this  day  the  people  of  the  old  Italian  communes; 
there  the  tradition  of  a local  and  popular  regime  is  strong; 
there  the  love  of  individual  property  actively  opposes  capital- 
ist centralization.”  (Du  Socialisme  au  Fascisme,  pp.  75-76). 

The  National  Socialist  movement  in  Germany  advocates 
the  same  policy.  Hitler  insists  that  “the  coming  government 
(of  the  National  Socialists)  will  have  its  strongest  founda- 
tion in  the  German  peasants.”  (Der  Angriff,  July  4,  1932). 

Fascist  strategists  thus  propose  to  fuse  the  interests  of  the 
middle  class  and  of  the  peasantry  under  the  guidance  and 
control  of  the  fascist  state.  The  village  is  to  remain  back- 
ward, ignorant  and  superstitious.  The  city  is  to  continue  to 
feed  on  the  proceeds  of  village  exploitation. 

e.  The  fascists  and  the  wage-workers 
Fascism  distinguishes  sharply  between  the  wage-worker 
and  the  class-conscious  movement  of  the  proletariat.  It 
aims  to  conciliate  the  wage-worker  and  to  draw  him  into  the 
Fascist  movement.  It  aims  to  destroy  root  and  branch  the 
wage-workers’  class-conscious  revolutionary  organizations. 

The  official  attitude  of  the  Italian  Fascists  toward  labor 
is  described  in  a Labor  Charter  drawn  up  by  Mussolini  and 
his  confreres,  and  promulgated  April  21,  1927.  The  central 
theme  of  this  Labor  Charter  is  stated  in  Articles  1 and  2: 
“Article  1. — The  Italian  nation  is  an  organism  possessing 
a purpose,  a life,  and  instruments  of  action  superior  to  those 
possessed  by  the  individuals  or  groups  of  individuals  who 
compose  it.  The  nation  is  a moral,  political,  and  economic 
unity  integrally  embodied  in  the  Fascist  State. 

“Article  2. — Labor  in  all  its  manifestations,  whether  mental, 


24 


FASCISM 


technical,  or  manual,  is  a social  duty.  It  is  by  virtue  of  this 
fact,  and  by  virtue  of  this  fact  alone,  that  labor  falls  within 
the  purview  of  the  State.  When  considered  from  a national 
point  of  view,  production  in  its  manifold  forms  constitutes 
a unity,  its  many  objectives  coinciding  and  being  generally 
definable  as  the  well  being  of  those  who  produce,  and  the 
development  of  national  power.” 

The  Labor  Charter  advances  four  propositions:  (1)  that 
the  state  is  superior  to  the  individual;  (2)  that  labor  is  a 
social  duty;  (3)  that  it  is  better  to  preserve  individual  ini- 
tiative under  a system  of  private  property  than  it  is  to 
establish  socialism;  and  (4)  that  economic  life  must  be 
planned  and  controlled  through  corporations  which  consti- 
tute a branch  of  the  state  machinery.  The  Charter  was  an 
after-thought,  drawn  up  rather  hastily  to  meet  the  storm  of 
proletarian  opposition  that  threatened  the  Italian  Fascist 
Regime  during  1925  and  1926.  It  outlines  the  policy  of  con- 
cessions to  workers  so  long  as  they  accept  the  fascist  dic- 
tatorship. 

f.  The  fascists  and  the  proletarian  revolution 

Fascism  became  a political  factor  in  central  and  western 
Europe  during  the  years  when  the  wave  of  proletarian  revolu- 
tion was  sweeping  through  Russia,  Germany,  Austria-Hun- 
gary, and  Italy.  It  grew  most  rapidly  in  precisely  those 
countries  where  the  proletarian  revolution  showed  the  great- 
est vigor.  There  were  two  reasons  for  this:  first  the  menace 
of  revolution  drove  the  propertied  and  privileged  into  a united 
front;  and  second,  the  sharper  the  revolutionary  situation, 
the  greater  was  the  need  for  fascism  to  take  form  organiza- 
tionally and  to  take  action  politically. 

Perhaps  it  is  not  possible  to  say  as  the  workers  organized 
and  reached  for  power,  the  propertied  and  privileged  united 
and  struck  back  at  the  workers  with  the  handiest  weapon 
at  their  disposal — the  fascist  movement,  but  there  is  much 
truth  in  this  statement.  At  any  rate  it  is  certain  that  the 
first  big  task  of  fascism,  afer  it  established  an  organization, 
was  to  smash  the  apparatus  of  the  proletarian  revolution. 

Certain  spokesmen  for  the  Second  International  have 
jumped  from  this  generalization  to  the  conclusion  that  fas- 
cism is  the  reaction  to  communism;  that  if  there  were  no 
communist  movement  there  would  be  no  fascist  movement. 


FASCISM 


25 


Hence,  the  formula  so  often  stated  by  those  who  follow  this 
line  of  thought:  to  prevent  fascism,  suppress  communism. 
Such  argument  ignores  the  forces  lying  behind  both  commu- 
nism and  fascism. 

Fascism  is  the  reaction  of  the  propertied  and  privileged 
to  the  general  crisis  in  capitalist  imperialism.  War,  eco- 
nomic collapse,  colonial  revolt  and  the  proletarian  revolution 
are  all  aspects  of  the  general  crisis,  and  in  that  sense  only 
they  are  all  responsible  for  fascism.  Even  were  there  no 
working  class  movement,  the  propertied  and  privileged  would 
be  compelled  to  retreat  to  fascism  as  the  superstructure  of 
capitalist  imperialism  comes  tumbling  down  about  their  ears. 
The  suppression  of  the  communist  movement  does  not  pre- 
vent the  rise  of  fascism.  It  merely  destroys  the  militant  and 
aggressive  leadership  of  the  proletarian  revolution. 

An  interpretation  of  the  relation  between  fascism  and  the 
working  class  movement  was  given  by  D.  Manuilsky  at  the 
11th  Plenum  of  the  Communist  International:  “Capital  has 
become  not  stronger  but  weaker,”  he  argued.  “Fascism  re- 
flects the  dialectical  contradictions  of  social  development. 
In  it  are  contained  both  elements — both  the  attack  of  the 
ruling  classes  and  their  disintegration.  In  other  words,  the 
Fascist  development  can  lead  both  to  the  victory  of  the  pro- 
letariat and  its  defeat.  . . . 

“If  the  working  class  conducts  an  active  struggle  against 
Fascism,  then  the  more  rapidly  will  the  elements  of  decay 
develop  in  the  latter.  If  the  proletariat  retreats  without 
struggle,  as,  for  example,  in  Italy  in  1920,  the  more  strongly 
will  stand  out  the  features  in  Fascism  of  attack  on  the  work- 
ing class.  The  first  path  leads  to  victory  over  Fascist  dic- 
tatorship, the  second  to  the  defeat  of  the  proletariat.” 

Fascism  and  the  proletarian  revolutionary  movement  are 
strongly  antagonistic.  Fascism  builds  on  private  property 
and  profit  economy.  The  proletarian  class-conscious  wage- 
workers aim  to  replace  both  institutions,  by  a socialized  use 
economy.  The  success  of  one  of  these  movements  involves 
the  destruction  of  the  other.  The  fascist  road  to  power  lies 
through  the  consolidation  of  the  middle  class;  cooperation 
between  the  unified  middle  class  and  the  ruling  class;  the 
winning  over  of  vacillating  working-class  elements,  and  a 
united  attack  against  the  organizations  of  the  proletarian 
revolution. 


26 


FASCISM 


3.  The  Organization  of  Fascist  Society 
Fascist  society  is  built  upon  profit  economy.  It  contains 
an  owning  class  and  a working  class.  It  accepts  exploita- 
tion. Despite  revolutionary  promises,  fascist  society  does 
not  differ  essentially  from  any  other  phase  of  profit  economy, 
a.  Private  property  and  profit 
Private  property,  in  its  more  familiar  aspects,  dominates 
the  economic  life  of  every  nation  that  has  moved  along  the 
path  toward  fascism.  Italy,  having  gone  farthest  in  the  or- 
ganization of  a fascist  society  provides  the  best  illustration 
of  the  relation  between  fascism  and  private  property. 

Not  only  private  property,  but  small-scale  land-holding  and 
profit-making  enterprises  have  been  particularly  encouraged 
by  fascist  statesmen,  who  regard  “private  initiative  in  the 
field  of  production  as  the  most  useful  and  efficient  instrument 
for  furthering  the  interests  of  the  Nation.”  (Charter  of 
Labor,  Article  7).  Fascism  has  drawn  its  chief  support  from 
middle  class  elements  that  almost  without  exception  own 
land,  houses,  productive  tools  or  other  private  property  forms 
that  represent  exploitive  power.  Since  the  fascist  leaders 
desire  to  broaden  the  social  basis  for  their  movement,  they 
have  aimed  at  increasing  the  number  of  small  property 
holders  and  of  small  business  men. 

Fascist  policy  thus  seeks  to  return  to  the  stage  of  small- 
scale,  competitive,  private  economy  that  preceded  the  trust 
movement.  Such  an  economy  increases  the  number  of  prop- 
erty owners  and  thus  provides  a constituency  that  will  fight 
for  the  perpetuation  of  private  property  forms.  Further- 
more, small-scale  farming,  manufacturing  and  trade  are  more 
nearly  self-sustaining  than  are  large  scale  business  activities, 
and  they  involve  a smaller  proportion  of  wage-workers. 
Hence  they  fit  more  satisfactorily  into  the  picture  of  a self- 
sufficient  economy. 

Fascism  preserves  private  property  and  profit  economy, 
but  it  has  introduced  two  variants  into  the  property  code  of 
nineteenth  century  capitalism.  The  first  of  these  variants 
is  the  nationalization  of  railroads,  power  plants  and  other 
public  utilities  necessary  to  national  existence.  This  prin- 
ciple of  nationalization  has  not  been  fully  carried  out  even 
in  Italy.  On  the  other  hand,  the  trend  toward  state  capital- 
ism is  general  in  western  Europe.  Governments  are  acquir- 


FASCISM 


21 


ing  or  investing  heavily  in  private  enterprises  and  providing 
subsidies  for  shaky  industries  and  insolvent  banking  institu- 
tions. This  tendency  is  reviewed  in  detail  by  Emil  Lengyel 
in  the  Annalist  for  November  4,  1932. 

The  second  variant  in  the  private  property  principle  is  the 
duty  owed  by  property  owners  to  the  nation.  Under  this 
variant,  if  a farm  or  mine  or  factory  is  unused  or  misused, 
the  state  may  interfere  and  punish  the  property  owner  for 
his  failure  to  make  the  best  possible  use  of  the  property  and 
thus  to  fulfil  the  social  obligation  he  owes  the  nation. 

With  these  minor  variants,  fascism  retains  the  more  im- 
portant forms  of  private  property  that  have  characterized 
every  exploiting,  class-divided  society*  Individual  profit  re- 
mains under  fascism  as  the  chief  incentive  to  economic  activ- 
ity. Fascist  society  is  therefore  a profit-motivated,  acquisitive 
society  in  the  same  sense  that  Great  Britain  or  the  United 
States  is  acquisitive  and  profit-driven. 

b.  Peasant  proprietorship 

A necessary  phase  of  the  policy  of  encouraging  private 
property  and  profit  economy  in  a self-sufficient  nation  is  the 
increase  in  peasant  proprietorship.  Such  a policy  also  offers 
an  outlet  for  the  unemployed,  harrassed,  rebellious  city  work- 
ers, whose  only  avenue  of  effective  protest — their  revolution- 
ary organizations^has  been  destroyed  by  the  fascists  as  they 
advanced  to  seize  power. 

Something  has  already  been  said  on  this  point  in  the  sec- 
tion dealing  with  the  attitude  of  the  fascists  toward  the 
peasantry.  Here  it  is  sufficient  to  add  that  in  Italy,  and  in 
the  central  European  countries  where  fascism  has  made  head- 
way, the  number  of  small  land  holdings  has  noticeably  in- 
creased. Land  reform  in  Hungary  doubled  the  number  of 
small  property  holders.  (Landauer  and  Honegger,  Interna- 
tional Faschismus,  pp.  66-67).  There  were  2,575,925  German 
farms  of  less  than  2 hectares  (5  acres)  in  1907.  In  1925  the 
number  had  risen  to  3,027,431.  (Stat.  Jahrbuch  1931,  pp.  50- 
51).  Mussolini  is  encouraging  the  small  farmer.  Reclaimed 
land  is  being  subdivided.  Idle  land  is  being  broken  up. 
Farmers,  using  hand  tools,  cattle,  donkeys  and  horses,  are 
being  urged  to  cultivate  sufficient  land  for  the  support  of  a 
family. 

Schneider  calls  attention  to  an  important  shift  in  Italian, 


28 


FASCISM 


Fascist  plans  for  peasant  proprietorship.  “At  first  fascist 
tactics  were  to  increase  small  holdings.  Big  estates  were 
divided  and  sold  on  easy  terms  to  peasants.  But  it  was  soon 
discovered  that  these  peasants  were  so  thrifty  in  their  effort 
to  pay  for  their  farms,  that  they  threw  many  farm  laborers 
out  of  work.  Consequently  the  outright  selling  of  land  was 
abandoned  in  favor  of  ‘colonial’  share-holding  tenant  con- 
tracts. Another  reason  given  in  favor  of  the  tenant  plan  is 
that  by  keeping  ownership  concentrated,  agricultural  savings 
and  capital  could  be  controlled  more  easily  and  made  more 
mobile.  This  is  one  of  the  prime  efforts  of  fascism  to  en- 
courage agricultural  savings  and  to  reinvest  these  in  agricul- 
tural improvements.  It  is  in  this  way  that  the  government 
hopes  gradually  to  pay  for  its  huge  investments  in  agricul- 
tural developments.”  (Schneider,  Making  the  Fascist  State, 

p.  211). 

In  Germany,  where  the  number  of  farms  under  five  acres 
exceeds  3 millions,  the  same  policy  is  being  carried  out. 
Unemployment  and  starvation  in  the  industrial  centres  are 
driving  the  workers  back  to  the  land,  where  they  buy  or 
rent  plots  sufficient  for  family  self-support  and  large  enough 
to  provide  a tiny  surplus  that  is  bartered  or  offered  for  sale 
in  the  public  markets. 

All  through  Central  Europe  millions  of  peasants  work  the 
land,  sow’,  cultivate  and  harvest  by  hand.  This  is  of  course 
true  in  the  narrow  valleys  and  on  the  hillsides  of  Austria, 
Germany  and  northern  Italy.  It  is  equally  true  on  the  broad 
plains  of  Lombardy  and  of  Hungary.  Small-scale  peasant 
agriculture,  accompanied  as  it  is  in  almost  all  cases  by  the 
division  of  the  land  into  tiny  plots  and  strips,  involves  hand 
labor,  and  lowers  the  level  of  productivity  to  the  point  where 
the  combined  efforts  of  a family  will  yield  only  a bare  sub- 
sistence. 

Hand  in  hand  with  the  return  to  self-sufficient  peasant 
economy  comes  the  revival  of  village  industry, — the  shoe- 
maker, the  smith,  the  wheel-wright,  the  tailor.  In  the  middle 
ages  each  European  village  raised  its  own  food  and  had  its 
own  quota  of  artisans.  Four  centuries  ago  virtually  the 
whole  of  western  Europe  was  made  up  of  self-sufficient  vil- 
lages, with  market  towns  here  and  there,  and  a few  trading 
cities  on  rivers  and  sea  coasts.  Such  a condition  now  pre- 
vails in  portions  of  Greece,  Bulgaria,  Jugoslavia  and  other 


FASCISM 


29 


central  European  countries  where  modern  industry  has  never 
gained  a foothold.  Fascist  policy  is  pushing  western  Europe 
back  to  this  same  level  by  ‘balkanizing’  its  entire  economy. 

c.  Class  collaboration 

Fascist  statesmen  desire  to  bridge  the  gulf  between  ex- 
ploiters and  workers,  while  retaining  the  institutions  of  pri- 
vate property  and  profit.  This  they  hope  to  do  through  a 
system  of  laws  that  aim  to  make  exploiter  and  worker  organic 
and  subordinate  parts  of  the  nation-state. 

Long  before  1919,  this  movement  toward  capital-labor  co- 
operation was  begun  in  the  collective  bargaining  between  em- 
ployer associations  and  trade  unions.  It  was  continued  in 
post-war  Germany  under  a system  of  legalized  factory  coun- 
cils and  labor  arbiters  with  theoretical  jurisdiction  over  all 
labor  disputes.  It  appeared  in  Great  Britain  as  “Mondism” — 
developed  through  joint  committees  of  the  employers  asso- 
ciations and  the  Trade  Union  Congress.  It  reached  its  high- 
est stage  in  Italy  in  the  system  of  class-unity  organs  that 
comprise  the  corporative  state. 

The  Italian  Labor  Code  and  the  Law  of  Corporations  de- 
clare the  nation  to  be  above  all  classes.  The  state  aims,  not 
to  represent  a class,  but  to  unify  the  population  and  thus  to 
eliminate  class  conflict.  To  this  end,  bosses  and  workers 
are  legally  forbidden  to  engage  in  any  class  war.  Strikes 
and  lock-outs  are  alike  outlawed,  and  elaborate  machinery 
is  established  for  the  arbitration  of  labor  disputes. 

The  law  of  April  3,  1926,  provides  in  Article  18  that:  “Em- 
ployers who  close  their  factories,  enterprises,  and  offices 
without  justifiable  reasons  and  for  the  sole  object  of  com- 
pelling their  employees  to  modify  existing  labor  contracts, 
are  punishable  by  a fine  of  from  ten  thousand  to  one  hundred 
thousand  lire. 

“Employees  and  laborers  who,  in  groups  of  three  or  more, 
cease  work  by  agreement,  or  who  work  in  such  a manner 
as  to,  disturb  its  continuity  or  regularity,  in  order  to  compel 
the  employers  to  change  the  existing  contracts,  are  punish- 
able by  a fine  of  from  one  hundred  to  a thousand  lire.” 

The  same  law  contains  a chapter  headed  The  Labor  Court. 
“All  controversies  concerning  collective  labor  relations”  are 
declared  to  fall  “within  the  jurisdiction  of  the  courts  of  ap- 
peal, functioning  as  labor  courts.”  Under  this  law,  neither 


30 


FASCISM 


trade  union  nor  employers  associations  can  take  the  law 
into  their  own  hands.  Each  issue,  as  it  arises,  must  be  set- 
tled by  arbitration.  If  that  fails,  the  controversy  goes  to 
the  appointed  court. 

One  enthusiastic  convert  to  fascism,  the  former  guildsman 
Odon  Por,  hails  this  achievement  of  fascism  as  epoch  making. 
“Capital  and  labor  will  lose  their  class  character,”  he  writes 
in  the  Year  Book  of  the  International  Centre  of  Fascist 
Studies.  “From  the  corporation  will  emerge  not  the  capital- 
ist and  the  proletarian,  but  the  manager  and  employee  of 
production.  The  class  struggle  has  ceased  and  has  been  re- 
placed by  the  State  verdict.”  (A  Survey  of  Fascism,  p.  157). 

Italian  fascism  outlaws  strikes  and  lock-outs,  but  legalizes 
the  private  ownership  of  capital  and  the  accumulation  of 
profit  by  the  capitalist.  Strikes  and  lock-outs  are  merely 
two  aspects  of  a conflict  which  is  rooted  in  the  system  of 
private  property  in  production  goods  and  private  profit  from 
the  exploitation  of  workers.  Thus  the  causes  of  class  strug- 
gle remain  in  Italy,  although  some  of  the  superficial  aspects 
are  forbidden. 

Strikes  of  serious  proportions  occurred  in  Italy  during 
1923,  1924,  and  1925,  before  the  machinery  of  the  corporative 
state  was  in  working  order.  Since  that  time,  wages  have 
been  reduced,  the  hours  of  work  have  been  extended,  un- 
employment has  increased,  and  standard  of  living  of  the 
wage-working  masses  has  been  lowered,  and  yet  major  labor 
disturbances  have  been  rare  occurences.  Official  sources 
give  the  number  of  strikes  as  238  for  1924  and  211  for  1925. 
The  militancy  displayed  by  the  Italian  workers  during  1924 
and  1925  led  to  vigorous  government  intervention.  The  re- 
sults of  this  intervention  appear  in  the  Agreement  of  Vidoni 
Palace  (October  2,  1925)  under  which  the  Italian  bosses  offi- 
cially recognized  the  Union  of  Fascist  Syndicates  as  the  rep- 
resentative of  the  workers;  the  workers  officially  recognized 
the  General  Confederation  of  Industry  as  the  representative 
of  the  bosses;  both  agreed  to  submit  disputes  to  a joint  board, 
and  factory  committees  were  dissolved.  By  this  agreement 
the  fascist  trade  unions,  which  represented  less  than  20  per 
cent  of  the  workers,  gained  official  recognition  as  the  sole 
spokesmen  for  the  wage-working  masses. 

How  were  such  results  achieved?  Through  a policy  which 
unified  the  middle  classes,  strengthened  the  owning  peasan- 


FASCISM 


31 


try,  and  isolated  the  wage-working  masses.  During  the 
revolutionary  period  from  1919  to  1921,  many  of  the  peasants 
stood  with  the  workers  for  the  overthrow  of  capitalism. 
Today  these  peasant  elements  seem  to  have  made  common 
cause  with  the  propertied  and  privileged.  Italian  fascism 
has  consolidated  sufficient  support  behind  its  program  of 
class  collaboration  under  a unitary  state  to  isolate  the  class 
conscious  workers  and  compel  them  for  the  time  being  to 
accept  its  verdicts.  The  institution  through  which  such  re- 
sults have  been  achieved  is  the  legalized  syndicate,  function- 
ing through  the  Ministry  of  Corporations. 

d.  Syndicates  and  corporations 
A fascist  corporation  is  an  organization  of  syndicates. 
Syndicates  are  legally  recognized  and  chartered  associations 
of  employers,  of  workers,  and  of  intellectuals.  Thus  the 
corporation,  functioning  under  the  Ministry  of  Corporations, 
is  part  of  the  essential  machinery  of  the  fascist  state.  The 
Charter  of  Labor  describes  the  function  of  syndicates  and 
corporations  in  Article  6:  “The  trade  associations  (syndi- 

cates) legally  recognized  guarantee  equality  before  the  law 
to  employers  and  employees  alike.  They  maintain  discipline 
in  labor  and  production  and  promote  measures  of  efficiency 
in  both.  The  Corporations  constitute  the  unifying  organiza- 
tion of  the  elements  of  production  (capital  and  labor)  and 
represent  the  common  interests  of  them  all.  By  virtue  of 
this  joint  representation,  and  since  the  interests  of  produc- 
tion are  interests  of  the  Nation,  the  Corporations  are  recog- 
nized by  law  as  organs  of  the  State.” 

Schneider,  in  liis  comprehensive  study  Making  the  Fascist 
State,  (pp.  149-150)  credits  Alfredo  Rocco  with  the  revival 
of  the  term  “corporation”  and  with  stripping  revolutionary 
implications  away  from  syndicalism.  Rocco  suggested  the 
possibility  of  a national  syndicalism  as  early  as  1908.  In  1914 
he  wrote  of  the  possibility  of  national  syndicalism  through 
mixed  syndicates.  This  idea,  Rocco  held,  “is  nothing  but  our 
ancient  corporationism.”  He  added:  “The  Corporations, 

Which  were  overthrown  by  the  individualism  of  the  natural 
rights  philosophy  and  by  the  equalitarianism  of  the  French 
Revolution,  may  well  live  again  in  the  social  ideas  of  Italian 
nationalism  ...  In  the  Corporations,  we  have  not  an  absurd 
equality,  but  discipline  and  differences.  In  the  corporations 


32 


FASCISM 


all  participate  in  production,  being  associated  in  a genuine 
and  fruitful  fraternity  of  classes.” 

The  Italian  Labor  Charter  (Article  3)  provides  that  “Or- 
ganization whether  by  trades  or  by  syndicates  is  unrestricted, 
but  only  the  syndicate  legally  recognized  by  the  State  and 
subject  to  the  State  control  is  empowered: 

“To  legally  represent  the  particular  division  of  employers 
or  employees  for  which  it  has  been  formed; 

“To  protect  the  interests  of  these  as  against  the  State  or 
as  against  other  trade  organizations; 

“To  negotiate  collective  labor  contracts  binding  upon  all 
those  engaged  in  the  branch  in  question; 

“To  levy  assessments  and  to  exercise,  in  connection  with 
the  branch,  specified  functions  of  public  import.” 

Ten  per  cent  of  the  employers  or  workers  in  any  field 
may  organize  a syndicate,  secure  legal  recognition  and  speak 
and  bargain  in  the  name  of  the  entire  group.  This  last  pro- 
vision has  made  it  possible  for  a small  minority  of  fascist 
workers  to  organize,  secure  official  recognition  and  bargain 
in  the  name  of  the  entire  body  of  workers. 

The  system  established  in  1926  provided  for  thirteen  syn- 
dicates. These  included  a syndicate  of  employers  and  one  of 
employees  in  industry,  in  agriculture,  in  merchandizing,  in 
maritime  and  air  transport,  in  land  transport  and  inland 
navigation  and  in  banking.  The  thirteenth  syndicate  was 
that  for  intellectuals.  By  1929,  3,798,000  employers,  8,048,000 
employees  and  143,000  intellectuals  had  enrolled. 

The  law  of  Corporations  (Article  42)  provides  for  uniting 
“the  national  syndical  organizations  of  the  various  factors 
of  production,  employers,  intellectuals  and  manual  workers 
in  a definite  branch  of  production,  or  in  one  or  more  definite 
categories  of  enterprises.  The  organizations  thus  joined  con- 
stitute a corporation.”  Each  corporation  is  established  by  a 
decree  of  the  Ministry  of  Corporations. 

Beside  the  Ministry  of  Corporations,  created  in  1923,  there 
is  a National  Council  of  Corporations,  created  in  1926  and 
greatly  strengthened  by  the  law  of  March  20,  1930.  The  Na- 
tional Council  consists  of  about  100  members,  representing 
the  thirteen  national  syndicates,  and  certain  government  de- 
partments. The  National  Council  is  subdivided  into  sections: 
one  for  industry,  one  for  agriculture,  one  for  merchandizing, 
one  for  marine  and  air  transport,  one  for  land  transport  and 


FASCISM 


33 


inland  navigation,  one  for  banking,  and  one.  for  the  profes- 
sions. As  the  powers  of  the  Council  of  Corporations  are  ex- 
tended, it  takes  on  more  and  more  of  the  character  of  a nation- 
al planning  council,  with  certain  authority  to  control,  veto  and 
initiate  economic  policy. 

Syndicalists  have  long  urged  that  community  life  should 
be  organized  in  economic  rather  than  in  geographic  units. 
The  National  Council  of  Corporations  therefore  gives  the 
Italian  government  a definitely  syndicalist  slant.  The  same 
form  of  organization  is  continued  through  the  entire  cor- 
porative state  of  the  Italian  Fascists. 

e.  The  corporative  state^ 

The  capitalist  state  was  designed,  theoretically,  to  repre- 
sent the  “community.”  Practically,  it  was  an  agency  of  the 
ruling  class.  Liberalism  tried  to  make  the  class  state  a 
mediator  between  the  partisans  in  the  class  war.  The  fascist 
program  called  for  a state  strong  enough  and  universal 
enough  to  stand  above  every  separate  interest  of  the  com- 
munity, to  be  an  end  in  itself  and  therefore  to  outlaw  the 
class  war  and  adjudicate  the  issues  to  which  the  class  war 
gave  rise.  The  Bologna  Syndicalist  Congress  on  January 
24,  1922,  expressed  the  ideal  thus:  “The  nation,  taken  as  the 
highest  synthesis  of  all  the  material  and  spiritual  values  of 
the  race,  is  above  individuals,  occupations  and  classes.  Indi- 
viduals, occupations  and  classes  are  the  instruments  which 
the  nation  employs  to  reach  its  greatest  glory.  The  inter- 
ests of  individuals,  of  professions  and.  of  classes  acquire  the 
stamp  of  legitimacy  when  they  come  to  be  embodied  in  the 
plan  of  the  higher  national  interests.” 

The  corporative  state  of  the  Italian  Fascists  thus  assumes 
a position  high  above  the  state  of  western  liberalism.  “For 
liberalism  (as  for  democracy  and  socialism)”  said  Rocco  in 
1925,  “human  society  is  the  sum  of  its  living  individuals;  for 
fascism’  society  is  the  accumulated  unity  of  an  indefinite 
series  of  generations.” 

Such  grandiose  ideas  were  held  by  the  poet  and  mediaeval- 
ist  d’Annunzio  when  he  seized  Fiume  for  Italy  and  wrote 
the  charter  for  his  miniature  corporative  state.  There  were 
to  be  ten  corporations:  (1)  for  laborers,  artisans  and  small 
farmers;  (2)  for  technicians  and  administrators;  (3)  for 
merchants;  (4)  for  industrial  and  agricultural  employers; 


34 


FASCISM 


. O 

(5)  for  public  employers;  (6)  for  intellectuals;  (7)  for  pro- 
fessional persons;  (8)  for  cooperatives;  (9)  for  mariners,  and 
(10)  for  “the  mystic  servants  of  the  civic  sanctuary.”  These 
corporations  were  to  be  a revival  of  the  corporations  that 
had  ruled  the  mediaeval  Italian  trading  cities,  and  were  to 
be  the  governing  force  in  the  corporative  state. 

Prof.  Gentile  explains  that  the  syndicates  and  corporations 
were  needed  to  impose  state  discipline  and  to  enable  the 
fascists  to  discover  the  individual,  “who  exists  as  a special- 
ized productive  force,  and  who,  by  the  fact  of  his  specializa- 
tion, is  brought  to  unite  with  other  individuals  of  his  same 
category  and  comes  to  belong  with  them  to  the  one  great 
economic  unit  which  is  none  other  than  the  nation.”  (Foreign 
Affairs,  vol.  6,  p.  303). 

This  corporative  state,  which  is  built  around  organized 
productive  groups  and  which  focusses  them  in  its  Ministry 
of  Corporations,  is  prepared  to  fulfil  the  functions  described 
in  Article  9 of  the  Labor  Charter:  “The  State  intervenes  in 
economic  production,  only  in  cases  where  private  initiative  is 
lacking  or  insufficient  or  where  political  interests  of  the 
State  are  involved.  Such  intervention  may  take  the  form 
of  supervision,  of  promotion,  or  of  direct  management.” 
Syndicate,  corporation  and  corporative  state  are  thus  the 
institutions  of  an  organized  profit  economy  within  the  boun- 
daries of  a single  nation. 

The  corporative  state  in  Italy  is  becoming  “a  single,  na- 
tional, centralized  workshop,”  Schneider  writes.  (Making 
the  Fascist  State,  p.  212).  “The  political  and  the  economic 
orders  are  being  fused  into  the  corporate  state  and  govern- 
ment is  frankly  becoming  political  economy.” 

This  idea  of  the  corporative  state  as  an  avenue  of  escape 
from  the  chaos  prevailing  in  western  society  is  not  confined 
to  Italy.  The  strong  state  has  numerous  and  powerful  ad- 
vocates in  many  western  countries.  C.  E.  M.  Joad,  writing 
of  the  attitude  of  British  Fascists  (Political  Quarterly,  vol. 
2,  p.  93)  gives  their  program  for  the  remodeling  of  Parlia- 
ment. “The  model  I have  frequently  heard  suggested  for 
the  House  of  Commons  is  that  of  a meeting  of  the  share- 
holders of  a company,  and  the  relation  of  members  of  Par- 
liament to  the  Government  that  of  shareholders  to  directors, 
with  the  qualification  that  the  shareholders  might  meet  not 
once  but,  say,  half-a-dozen  times  a year  to  receive  and  com- 


FASCISM 


35 


ment  upon  the  directors'  reports.  If  the  shareholders  are 
sufficiently  dissatisfied  they  pass  a vote  of  censure,  the  direc- 
tors resign  and  there  is  an  election." 

The  National  Government  organized  in  Great  Britain  in 
the  summer  of  1931  included  conservative,  liberal  and  labof 
leaders.  They  laid  aside  their  differences  and  united  to  meet 
a national  emergency  by  national  action.  From  1914  to  1919 
a similar  political  truce  was  observed  in  most  of  the  warring 
countries.  Recently  there  has  been  much  talk  by  responsible 
American  politicians  and  business  men  of  the  need  for  a 
strong  United  States  government.  It  has  remained  for 
Italian  Fascists  to  realize  their  ideal  by  establishing  the  cor- 
porative state. 

f.  Fascism  and  the  church 

Among  the  institutions  of  capitalist  imperialism  which  fas- 
cism has  adopted,  the  church  occupies  a prominent  place. 
Many  of  the  Italian  Fascists,  including  Mussolini,  were  free- 
thinkers earlier  in  their  careers.  The  struggle  to  gain  and 
to  hold  power  has  led  them  to  lean  upon  the  church  for 
moral  and  social  support.  Fascism  is  extremely  authori- 
tarian. The  Roman  Catholic  Church  as  the  chief  exponent 
of  authoritarianism  in  religion  therefore  commended  itself 
particularly  to  the  fascists. 

On  April  3,  1931,  Mussolini  said:  “Fascism  is  the  strongest 
of  all  heresies  that  strike  at  the  doors  of  the  churches.  . . . 
Away  with  these  temples  that  are  doomed  to  destruction; 
for  our  triumphant  heresy  is  destined  to  illuminate  all  brains 
and  hearts.”  On  June  27,  1922,  however,  he  followed  Gen- 
tile's declaration  that  “an  irreligious  State  is  not  a State  at 
all”  by  writing  in  Popolo  dTtalia:  “It  is  not  the  intention  of 
Fascism  to  drive  God  from  heaven  and  sweep  religion  from 
the  face  of  the  earth.”  (Prezzolini,  Fascism,  p.  131).  And 
now  Italian  Fascism  has  moved  officially  toward  the  Roman 
Church.  A signed  article  by  Mussolini  in  the  New  York 
Times  for  September  18,  1932,  contained  these  sentences: 
“In  the  Fascist  State  religion  is  considered  to  be  one  of  the 
deepest  spiritual  manifestations.  Religion  is,  therefore,  not 
only  respected  but  defended  and  protected.” 

The  pro-Catholic  position  officially  adopted  by  Italian 
Fascism,  led  naturally  to  three  important  lines  of  actions: 
(1)  the  teaching  of  the  Catholic  religion  was  introduced  into 


36 


FASCISM 


O 


the  Italian  schools;  (2)  no  Mason  was  permitted  to  wear  the 
badge  of  a Fascist;  (3)  after  lengthy  negotiations  a treaty 
was  signed  with  the  Pope  in  February,  1929,  creating  the 
Vatican  State.  Roman  Catholicism  thus  became  once  more 
the  official  religion  of  Italy,  and  church  and  state  were  again 
united. 

The  Nationalist  movement  in  Ireland  is  following  strik- 
ingly similar  lines.  William  Rust  sums  up  the  Fannia  Fail 
election  program  of  1932  in  these  words:  “De  Valera  aspires 
to  a mystic  medieval  paradise,  a happy  self-sufficient  Ire- 
land based  on  private  ownership  and  inspired  by  the  Catho- 
lic religion.”  (Labour  Monthly,  Aug.  1932,  p.  493). 

g.  Discipline  under  fascism 

Fascism  imposes  a stern  discipline  on  its  followers.  This 
discipline  is,  in  the  first  instance,  military.  Behind  the  dis- 
cipline of  physical  drill,  however,  there  is  a more  potent  dis- 
cipline, which  involves  the  unquestioning  acceptance  of 
authority.  This  mental  regimentation  has  characterized  the 
Roman  Church  for  centuries.  It  throttled  science  and  phil- 
osophy through  the  Dark  Ages  when  it  dominated  western 
European  life  and  thought.  In  Mexico  and  Spain  it  fastened 
the  chains  of  ignorance  and  superstition  on  the  masses  and 
held  them  there  until  they  were  thrown  off  by  revolution. 
Today,  in  western  Europe,  fascism  and  Roman  Catholicism 
are  striving  to  reestablish  this  reign  of  authority  which  was 
broken  with  such  difficulty  during  the  centuries  of  the  Re- 
naissance and  the  Reformation. 

Fascist  discipline  begins  early.  The  Italian  schools  are 
not  only  used  for  religious  instruction,  but  they  are  devoted 
to  an  elaborate  system  of  intensive  nationalist  propaganda. 

In  addition  to  the  schools  there  are  fascist  organizations 
for  university  students;  for  adolescent  boys;  for  adolescent 
girls;  for  young  boys,  and  for  young  girls.  In  these  organ- 
izations the  young  people  are  provided  with  uniforms,  drilled 
and  prepared  for  citizenship. 

A similar  control  is  exercised  over  the  publication  of  news- 
papers, magazines  and  books;  over  the  radio;  over  the 
movies,  and  every  other  form  of  public  expression.  The 
Italian  people  are  being  taught  to  feel  and  to  think  fascist. 
Ideologically  as  well  as  socially  and  economically,  fascism 
is  pressing  the  masses  back  toward  an  unquestioning  accept- 


FASCISM 


37 


ance  of  a god-ordained  social  system  in  which  each  human 
being  must  be  content  to  fill  the  place  to  which  he  has  been 
called  by  an  all-seeing  providence  speaking  through  the 
masters  of  church  and  state. 

Fascist  organization  is  definitely  mediaeval  in  character. 
It  is  founded  upon  a principle  of  local  economic  self-suffi- 
ciency which  expresses  itself  primarily  in  small  scale  indus- 
tries of  pre-industrial  Europe.  Its  economic  state  institu- 
tions,— the  syndicate  and  the  corporation, — are  modelled 
upon  similar  institutions  that  flourished  in  Italy  during  the 
middle  ages.  The  linking  of  church  and  state  point  back  to 
a period  before  the  Reformation.  The  institutional  expres- 
sions of  fascism  are  those  of  a self-sufficient,  pre-machine-age, 
agrarian  economy.  Fascist  spokesmen  describe  this  develop- 
ment as  “the  rise  of  fascist  culture.” 

4.  The  Achievements  of  Fascism 

Economic  statistics  show  that  during  its  fascist  decade 
Italy  has  passed  through  three  well  defined  periods.  The 
first  extended  from  the  fascist  seizure  of  power  in  1922  to 
the  consolidation  of  power  and  the  stabilization  of  the  lira 
in  1926-27.  The  second  period,  a brief  and  much  lauded  era 
of  buoyant  prosperity  for  the  Italian  business  class,  ended 
in  1929-30.  The  next  three  years  saw  Italy,  like  the  remainder 
of  the  capitalist  world,  slipping  rapidly  back  to  a lower  eco- 
nomic level. 

The  League  of  Nations  publishes  figures  covering  Italian 
steel  production,  freight  traffic,  new  capital  issues  and  foreign 
trade.  Average  monthly  steel  production  was  reported  as 

102.000  tons  in  1923  and  142,000  tons  in  1927.  For  the  next 
three  years  steel  production  averaged  175,000,  188,000  and 

148.000  tons  per  month.  In  19*31  steel  production  dropped 
to  121,000  tons.  For  the  first  seven  months  of  1932  it  aver- 
aged 110,000.  It  was  back  to  the  levels  of  1923.  The  figures 
of  freight  movement,  in  millions  of  kilometre-tons,  tell  the 
same  story.  The  average  monthly  tonnage  for  1924  was  872. 
For  1928  it  was  976.  The  tonnage  for  1930  was  1,024;  for 
1931,  893;  and  for  the  first  two  months  of  1932,  721.  New 
capital  issues  increased  rapidly  from  a monthly  average  of 
332  million  lira  in  1923  to  746  million  lira  in  1925.  Then 
there  was  a drop  to  264  million  in  1927,  followed  by  450  mil- 
lion in  1928,  607  million  in  1929,  514  million  in  1930,  and  360 


o 


38  FASCISM 

million  in  1931.  Foreign  trade  figures,  both  in  value  and  in 
tonnage,  followed  the  same  general  trend.  They  reached 
high  points  in  1925  and  1929,  and  in  1932  fell  away  to  ap- 
proximately their  1923  level.  In  the  first  seven  months  of 
1932  the  average  export  deficit  per  month  was  about  190 
million  lira. 

A significant  commentary  on  the  Italian  economic  trend 
is  provided  in  the  report  of  commercial  failures.  The  aver- 
age per  month  was  481  in  1923.  From  that  point  the  number 
has  increased  steadily  year  after  year.  In  1929  it  stood  at 
1,010.  For  1931  it  was  1,483.  During  the  first  seven  months 
of  1932  it  was  1,736  or  almost  four  times  the  monthly  average 
for  1923. 

Fascist  economy  has  not  been  able  to  escape  the  general 
business  paralysis  that  descended  upon  the  capitalist  world 
after  1929.  In  terms  of  production,  of  trade,  of  finance,  and 
of  commercial  failures,  the  decade  of  fascism  leaves  Italy 
at  approximately  the  same  economic  level  that  it  occupied 
in  1923.  Since  1929  the  direction  of  its  economic  curve  has 
been  steadily  downward. 

There  is  no  way  to  describe  accurately  the  effect  of  Fascist 
policy  upon  the  economic  life  of  the  Italian  masses.  Italian 
farmers  are  suffering  like  farmers  everywhere  from  the  ab- 
normally low  prices  of  agricultural  products.  The  wages 
of  Italian  farm  laborers  are  reported  in  the  International 
Labour  Review  (March  1932)  as  12.88  lire  per  working  day 
in  1923;  14.24  in  1926  (the  high  point);  12.94  in  1929  and 
10.49  lire  in  1931.  Real  wages  for  agricultural  workers  are 
given  in  the  same  study  as  107  in  1923;  89  in  1926;  97  in  1929 
and  87  in  1931. 

An  unemployed  army  has  appeared  among  Italian  wage- 
workers. The  League  of  Nations  reports  Italian  unemploy- 
ment as  122,000  in  1925;  414,000  in  1927;  406,000  in  1929; 
642,000  in  1930;  and  982,000  in  1931.  For  the  first  six  months 
of  1932  unemployment  averaged  over  a million.  These  are 
official  figures  covering  registered  unemployed.  The  actual 
number  of  unemployed  of  course  is  considerably  higher. 

Hourly  and  weekly  “average  nominal  wage  rates”  pub- 
lished in  the  International  Labour  Review  show  the  high 
point  for  industrial  wages  in  1925  and  1926.  “Average  nom- 
inal hourly  earnings”  for  the  Italian  cotton  industry  are 
given  as  1.74  lire  in  May  1925  and  1.61  lire  in  May  1929;  for 


FASCISM 


39 


iron  and  steel,  3.25  lire  and  3.06  lire  respectively;  for  the 
paper  industry,  1.99  and  1.92  lire.  Since  1929  they  have 
fallen  considerably. 

The  World  Economic  Survey  of  1931-32  published  by  the 
League  of  Nations,  in  August  1932,  gives  the  hourly  earnings 
in  the  principal  Italian  industries  at  100  for  1929;  100  for 
June  1930;  93  for  December  1930;  90  for  June  1931,  and  86 
for  December  1931.  The  actual  amount  paid  out  in  wages 
and  salaries  has  decreased  much  faster  than  this  owing  to 
the  rapid  increase  in  the  volume  of  unemployment,  which 
increased  by  150  per  cent  between  1929  and  the  end  of  1931. 
The  reduction  in  actual  earnings  (hourly  earnings,  modified 
by  unemployment)  is  considerably  greater  than  the  decrease 
in  the  cost  of  living.  On  their  face  these  returns  show  a 
considerable  worsening  in  the  economic  position  of  the 
Italian  wage  worker. 

Fascism  has  provided  a rallying  point  for  the  middle  class. 
It  has  drawn  important  ruling  class  forces  into  a united  front 
of  the  propertied  and  privileged.  In  the  period  of  catastrophic 
capitalist  decline  it  has  furnished  a militant  weapon  which 
might  be  used  against  the  forces  of  the  proletarian  revolu- 
tion. It  has  restored  the  strong  autocratic  state  and  linked 
it  once  more  with  an  authoritarian  church.  In  its  economic 
ventures  fascism  has  been  less  successful.  Fascist  Italy, 
like  all  of  the  other  capitalist  countries,  has  fallen  a victim 
to  the  world  economic  depression,  and  while  its  taxes  mount 
its  adverse  trade  balance  remains.  The  ruling  and  middle 
classes  of  Italy  may  have  advanced  their  interests  through 
their  support  of  fascism.  Unquestionably  the  position  of  the 
working  masses  has  been  worsened  under  the  fascist  regime. 

IV.  THE  FUTURE  OF  FASCISM 

Fascism  does  not  depend  on  one  man  or  one  small  group 
of  men.  It  is  not  confined  to  one  or  two  particular  countries. 
It  is  a movement  of  great  historic  significance  that,  unless 
all  signs  fail,  will  play  an  important  role  in  western  Europe, 
and  perhaps  elsewhere,  in  the  days  that  lie  immediately 
ahead. 

The  time  has  passed  when  fascism  can  be  dismissed  as  an 
“episode,”  an  “interlude,”  “a  temporary  aberration,  a symp- 
tom of  the  economic  stress  of  the  post-war  reconstruction 
period.”  Fascism  is  a permanent  feature  of  contemporary 


40 


FASCISM 


social  life,  and  while  it  is  impossible  to  predict  the  exact 
course  of  the  fascist  movement,  it  is  important  to  form  some 
judgment  regarding  the  general  role  which  fascism  will  play 
in  the  present  historic  epoch. 

1.  Fascism  and  Autarchy 

Any  attempt  to  estimate  the  role  of  fascism  in  the  present 
historical  situation  must  be  based  on  a correct  evaluation  of 
the  economic  and  political  implications  of  the  movement. 
In  its  earlier  stages  fascist  economics  was  confused.  Before 
1925  Mussolini  boasted  that  the  Italian  Fascists  had  no  eco- 
nomic program.  Even  the  German  National  Socialists  with 
13  million  voters  had  no  economic  program  worthy  the  name 
when  they  entered  the  crucial  election  campaigns  of  1932. 
Where  fascism  has  gained  power,  however,  as  in  Italy,  its 
economic  policies  have  become  clearer. 

a.  The  nature  of  fascism 

The  word  “fascism”  has  been  employed  to  describe  the 
policies  of  Mussolini  in  Italy,  of  Horthy  in  Hungary,  of 
Rivera  in  Spain,  of  Pilsudsky  in  Poland,  and  of  Hitler  in 
Germany.  In  its  more  generalized  form  the  word  has  been 
used  to  designate  a movement  that  is  sweeping  over  central 
and  western  Europe  and  over  certain  non-European  countries. 

Under  Part  II,  “The  Fascist  Program,”  and  Part  III, 
“Fascism  in  Action,”  a description  has  been  given  of  certain 
aspects  of  the  fascist  movement.  It  is  now  necessary  to  sum- 
marize these  descriptions  into  five  terse  generalizations  con- 
cerning the  nature  of  fascism: 

1.  Fascism  is  a movement  of  the  propertied  and  piivileged, 
who  are  seeking  a way  of  escape  from  the  destruction 
that  threatens  them  during  the  general  crisis  of  capi- 
talism. 

2.  The  movement  begins  in  the  middle  class,  gains  allies 
in  the  ruling  class  and  working  class,  and  as  it  grows 
in  power  becomes  the  chief  weapon  of  the  propertied 
and  privileged  in  their  survival  struggle. 

3.  Fascism  flourishes  best  in  regions  where  the  break- 
down of  capitalist  imperialism  is  most  complete  and 
where  property  and  privilege  must  fight  a life  and  death 
battle  with  the  proletarian  revolution. 

4.  The  root  principle  of  fascism  is  local  or  regional  eco- 


FASCISM 


41 


nomic  self-sufficiency,  in  a private  profit  economy.  Its 
chief  institutional  weapon  is  a unitary,  authoritarian 
state  backed  by  an  equally  authoritarian  church. 

5.  Fascism  in  action  rejects  the  principles  of  democracy, 
emphasises  the  role  of  social  inequality,  relies  for  its 
efficacy  on  the  autocratic  rule  of  the  elite,  and  estab- 
lishes institutions  and  practices  that  differ  fundamentally 
from  those  of  capitalist  imperialism. 

A.  The  Fascist  field  of  operations 
Rationalization,  war,  colonial  revolt,  proletarian  revolution 
and  economic  collapse  have  prepared  the  way  for  fascist  ad- 
vance. Where  these  forces  have  been  most  sharply  felt,  as 
for  example,  in  middle  Europe,  the  fascist  movement  has  de- 
veloped most  rapidly. 

Certain  modifications  of  this  statement  should  be  noted: 
In  countries  like  Hungary,  Roumania  and  Poland,  with 
relatively  small  middle  classes,  relatively  powerful  semi- 
feudal  landed  aristocracies,  and  negligible  wage-working 
masses,  the  landed  interests  have  been  strong  enough  to 
divert  the  fascist  movement  into  a dictatorship  of  big  land 
owners,  supported  by  business  men  and  bankers. 

In  countries  like  Germany  where  big  business  is  highly 
developed,  with  a corresponding  development  of  the  wage- 
working masses,  the  struggle  for  power  leads  to  a three-fold 
division  of  social  forces;  big  business,  supported  by  the  land- 
lords; the  middle  class;  and  the  proletariat.  This  three-fold 
division  results  in  a temporary  dead-lock,  since  no  one  of  the 
three  is.  strong  enough  to  take  power. 

Italy,  a country  lying,  in  its  social  composition,  midway 
between  the  two  extremes  represented  by  Hungary  and  Ger- 
many, is  the  ideal  field  for  fascism.  Big  business  and  big 
landowners  neutralize  each  other.  The  middle  class  is  rela- 
tively large  and  well  organized.  The  working  class  lacks 
a sense  of  solidarity  and  is  poorly  led.  The  peasants  are 
easily  won  to  the  side  of  property  and  privilege. 

This  statement  must  not  be  interpreted  to  mean,  however, 
that  fascism  is  a movement  peculiar  to  Italy,  Bonomi,  who 
holds  this  view,  writes:  “Fascism  . . . appears  as  a temporary 
phenomenon,  arising  from  causes  peculiar  to  Italian  politics. 
It  is  a product  of  the  weakness  of  the  Italian  nation.”  (Du 
Socialisme  au  Fascisme,  p.  164).  Bonomi  wrote  these  sen- 


42  FASCISM 

tences  in  1924.  Subsequent  developments  in  and  out  of  Italy 
have  showed  that  fascism  arises,  not  from  the  weakness  of 
the  Italian  nation,  but  from  the  progressive  weakening  of 
declining  capitalism. 

B.  The  revolutionary  role  of  fascism 

At  the  centre  of  the  fascist  movement  is  the  middle  class, 
seeking  to  save  itself  from  decimation  or  annihilation  by 
seizing  power  and  establishing  its  own  political  and  social 
institutions.  It  therefore  has  the  essential  characteristics  of 
a social  revolutionary  movement,  since  its  success  means  a 
shift  of  the  centre  of  power  from  one  social  class  to  another. 
Van  Leisen  holds  that  “Since  its  foundation  fascism  has  al- 
ways declared  itself  to  be  a revolutionary  party,  that  is  to  say 
a party  which  advocates  a profound  transformation  of  the 
constitution  and  a new  organization  of  national  life.”  (Expli- 
cation du  Fascisme,  p.  37). 

Fascism  arises  out  of  the  revolt  of  the  middle  class  against 
the  intolerable  burdens  of  capitalist  imperialism,  just  as  com- 
munism arises  out  of  a revolt  of  the  working  masses  against 
the  same  intolerable  burdens.  Both  fascism  and  communism 
were  energized  and  speeded  up  by  the  overwhelming  losses 
that  accompanied  imperial  economy.  Both  are  efforts  of 
social  classes  to  find  a way  out  of  the  growing  chaos  of  a 
disintegrating  social  order. 

Some  writers,  like  Gorgolini  in  his  book  Le  Fascisme,  hold 
that  the  fascist  movement  represents  not  revolution  but  reac- 
tion. Berry  describes  the  movement  as  “the  new  organiza- 
tion of  counter-revolutionary  defense.  It  is  the  weapon  of 
the  bourgeoisie  from  the  days  when  the  state  breaks  down 
and  fails  to  function.”  (Le  Fascisme  en  France,  p.  6).  Van 
Leisen  adds:  “If,  in  speaking  of  fascism,  one  wishes  to  use 
the  term  reactionary  it  is  necessary  to  specify  that  it  is  a 
violent  protest  against  all  of  the  ideas  and  the  governmental 
systems  born  of  the  French  Revolution  and  of  English  liber- 
alism.” (Explication  du  Fascisme,  p.  37). 

The  issue  hinges  on  a definition.  If  a social  revolution  is 
the  seizure  of  power  by  a social  class,  then  fascism  must  be 
described  as  a revolutionary  movement,  even  though  it  re- 
tains many  of  the  institutions  of  capitalism  and  even  though 
its  aims  be  opposed  to  those  of  the  working  class  revolution. 
The  test  must  come  in  evaluating  the  means  of  production 


FASCISM 


43 


employed  and  the  institutions  developed.  If  fascism  employs 
essentially  different  means  of  production,  and  organizes  es- 
sentially different  institutions  from  those  upon  which  the 
present  ruling  class  relies,  then  it  qualifies  as  a social  revo- 
lutionary movement. 

Van  Leisen  insists  that  fascism  is  a revolution.  “The 
struggle  against  Bolshevism  has  been  only  one  of  the  various 
manifestations  of  its  activity.  Its  principal  aim  has  been  to 
conquer  the  State  in  order  to  install  a new  and  national 
regime.  Communists,  populists,  democrats,  all  who  have 
tried,  whether  to  defend  the  pre-existing  State  or  to  conquer 
it  for  some  other  object,  have  been  its  enemies.  It  assumed 
power  by  a revolutionary  gesture:  the  march  on  Rome.  By 
another  act  of  the  same  character  it  began  its  governmental 
activity:  constitutional  reform.”  (Explication  du  Fascisme, 
pp.  58-9). 

Fascism  must  be  regarded  as  a revolutionary  movement. 
The  class  composition  of  its  adherents,  the  character  of  the 
struggle  it  has  waged,  and  the  policies  of  the  victorious 
Italian  Fascists  indicate  that  the  triumph  of  fascism  involves 
a basic  change  in  the  means  of  production;  a new  grouping 
of  class  forces,  of  institutional  relationships  and  of  ideas. 

C.  The  philosophy  of  fascism 

Fascism  gropes,  planlessly.  It  was  not  until  five  years 
after  the  seizure  of  power  that  the  Italian  Fascists  formulated 
their  Charter  of  Labor  and  their  Law  of  Corporations.  In 
the  interval,  they  had  organized  a nation-wide  movement 
and  had  consolidated  the  state  power.  The  present-day 
fascist  movements  of  Germany  and  other  countries  are  al- 
most equally  without  philosophy  or  definite  plans.  The 
propertied  and  privileged,  using  the  fascist  movement  to 
escape  from  decimation  or  annihilation,  have  no  clear  under- 
standing of  the  path  they  should  follow.  They  are  merely 
determined  at  all  hazards  and  by  every  necessary  means  to 
retain  control  of  their  property  and  privileges. 

The  necessity  for  preserving  an  established  institution  such 
as  private  property,  makes  the  Fascist  movement  essentially 
opportunistic.  It  can  have  no  great  ideal.  Its  driving  force 
is  the  desire  to  keep.  It  is  necessarily  a narrow,  restrictive 
movement.  O.  M.  Brown  writes:  “Fascist  principles,  like 
the  science  of  grammar,  may  be  said  to  have  been  evolved 


44 


FASCISM 


fiom  practice.  . . . Its  theories  of  government  and  social 
justice  grew  out  of  experience.  It  is  purely  empirical.  Its 
philosophy  is  pragmatism;  its  sole  guiding  principle  is  that 
working  principles  are  to  be  discovered  in  actual  practice.” 
(Current  History,  May  1931,  p.  161).  Reupke  in  his  Wirt- 
schaftssystem  des  Faschismus,  (p.  53)  holds  that  Italian 
Fascism  is'  religious  and  dogmatic,  aiming  at  “the  supremacy 
of  the  state  over  economy,”  and  using  “only  one  method: 
empiricism  and  eclecticism  or,  as  it  describes  itself:  intuitive 
relativity.”  Perhaps  it  is  true,  as  one  student  asserts,  that 
fascism  is  a combination  of  Catholicism,  nationalism  and 
syndicalism  based  on  the  teachings  of  St.  Thomas  Aquinas, 
Nietzsche,  William  James,  and  Sorel;  but  it  seems  more 
accurate  to  state  that  fascism  grows  out  of  the  pressing 
necessity  of  saving  the  property  and  privileges  of  a large 
class  in  capitalist  society  that  is  suffering  fearful  losses  as 
the  result  of  the  disintegration  of  capitalist  imperialism. 

D.  A working  definition  of  fascism 
Whatever  differences  may  arise  over  the  philosophy  of 
fascism,  there  can  be  little  question  regarding  its  medium  of 
action.  Fascism  is  working  through  the  self-sufficient  cor- 
porative state,  using  national  boundary  lines  as  the  bulwarks 
of  its  power  and  the  limitations  on  its  field  of  activity.  The 
directors  of  fascist  policy  are  the  elite,  who  discipline  the 
masses  in  the  interests  of  the  nation. 

A general  definition  of  fascism  is  given  by  Barnes  (Univer- 
sal Aspects  of  Fascism,  p.  35):  “A  political  and  social  move- 
ment having  as  its  object  the  re-establishment  of  a political 
and  social  order,  based  upon  the  main  current  of  traditions 
that  have  formed  our  European  civilization,  traditions  created 
by  Rome,  first  by  the  Empire  and  subsequently  by  the 
Catholic  Church.  Conversely,  Fascism  may  be  described  as 
the  repudiation  of  that  individualist  mentality  that  found 
expression  first  in  the  Pagan  Renaissance,  then  in  the  Re- 
formation and  later  in  the  French  Revolution,  not  to  speak 
of  the  Industrial  Revolution,  which  issued  in  ‘Capitalism’, 
itself  the  product  of  the  Reformation.” 

Such  a definition  suffers  from  three  serious  defects.  (1)  It 
make  fascism  merely  reactionary  or  atavistic.  (2)  It  takes 
no  account  of  the  class  character  of  the  movement.  (3)  It 
does  not  place  fascism  in  its  modern  historic  setting. 


FASCISM  45 

A more  adequate  definition  would  run  something  like  this: 

% 

1.  Fascism  is  a movement  of  the  propertied  and  privileged, 
initiated  by  the  middle  class,  and  led  first  by  members 
of  the  middle  class  and  later  by  members  of  the  ruling 
class, 

2.  who  are  retreating  from  the  system  of  capitalist  im- 
perialism, rendered  untenable  by  war,  economic  crisis 
and  colonial  revolt, 

3.  and  who  at  the  same  time  are  defending  themselves 
from  the  threat  of  proletarian  revolution. 

4.  These  elements  are  trying  to  barricade  themselves  be- 
hind strong  national  boundary  lines;  to  exterminate  the 
working-class  revolutionary  movement,  and  to  provide 
themselves  with  the  means  of  existence  through  a sys- 
tem of  self-sufficient  economy. 

This  definition  may  not  be  all-inclusive,  but  it  carries  a 
sense  of  the  dynamic  character  of  fascism.  Furthermore,  it 
makes  the  fate  of  the.  fascist  movement  turn  on  the  question 
of  the  workability  of  a self-sufficient  national  economy. 

b.  Economic  self-sufficiency 

The  autarchic  idea  is  very  old.  Through  the  centuries, 
many  city  states  and  nation  states  have  tried  to  feed  them- 
selves and  to  provide  the  necessary  raw  materials  upon  which 
their  existence  depended.  Various  means  were  employed  in 
the  course  of  these  efforts  to  reach  the  autarchic  goal;  plun- 
dering expeditions  to  meet  annual  deficits;  the  extension  of 
frontiers  by  conquest;  the  partial  or  general  monopoly  of 
trade;  the  control  of  the  precious  metals.  Yet,  under  the 
system  of  profit  economy  which  has  dominated  the  world 
through  so  many  centuries,  economic  self-sufficiency  and 
stability  have  never  been  attained.  The  social  structure  based 
upon  trade  economy  is  in  a state  of  chronic  disequilibrium. 
Periods  of  aggressive  trade  expansion  are  followed  by  epochs 
of  disastrous  contraction,  while  both  are  punctuated  by  ever- 
recurring  wars  and  revolutions. 

The  doctrine  of  autarchy  has  had  many  eminent  supporters 
during  modern  times.  The  mercantilist  school  of  economy 
was,  in  essence,  an  autarchic  school,  since  each  nation  was 
to  keep  exports  below  imports  in  order  to  add  to  its  supply 
of  precious  metals  through  its  favorable  balance  of  trade. 


46 


FASCISM 


Colbert,  the  great  French  economist  and  statesman,  formu- 
lated his  policies  in  terms  of  French  national  self-sufficiency. 
The  German  List,  in  his  National  System  of  Political  Econ- 
omy advanced  similar  views.  A modern  follower  of  List, 
the  Irish  leader  De  Valera,  demands  “a  reasonable  self-suf- 
ficiency.” His  ideal  for  Ireland  is  “village  industries  in 
which  every  individual  may  receive  a portion  of  the  national 
well-being.  Our  power  resources  are  sufficient  to  provide 
energy  for  domestic,  industrial  and  agricultural  uses  in  our 
towns  and  villages  and  on  our  farms.  With  this,  we  hope 
to  develop  a balanced  agricultural  and  industrial  economy 
which  will  enable  us  to  keep  our  people  on  the  land.  This 
is  our  goal.”  (New  York  Times,  Sept.  25,  1932). 

“Keeping  our  people  on  the  land”  is  the  goal  of  agricul- 
tural economy.  In  eighteenth  century  western  Europe  and 
nineteenth  century  central  Europe,  this  goal  was  constantly 
before  statesmen  who  were  striving  toward  economic  self- 
sufficiency. 

For  such  doctrines  the  world  of  expanding  capitalism  had 
no  place.  In  the  up-rush  of  profit  economy  that  accompanied 
and  followed  the  industrial  revolution  of  the  eighteenth  cen- 
tury, mercantilism  was  thrust  aside;  Colbert’s  ideal  for  a 
self-sufficient  France  was  forgotten;  List’s  National  System 
gathered  dust  on  library  shelves,  and  the  whole  pressure  of 
economic  forces  was  exerted  outward:  toward  markets,  col- 
onies, raw  materials,  trade  routes.  The  nineteenth  century 
bulged  with  the  expansive  pressure  of  capitalist  imperialism. 

The  tide  turned  early  in  the  present  century.  Glutted  mar- 
kets; accumulated  surpluses;  falling  profits;  growing  colonial 
resistance;  imperial  war  and  finally  revolution  brought  the 
forces  of  expansion  to  a standstill.  Autarchic  ideas  revived. 
The  old  books  were  re-read.  All  over  the  world  leaders  of 
fascist  movements  promised  their  followers  that  behind  the 
national  boundary  lines  they  would  establish  and  maintain  a 
system  of  self-sufficient  economy  under  which  private  proper- 
ty and  class  privileges  could  be  defended  and  perpetuated. 

Has  the  time  arrived  for  the  testing  of  these  ideas?  Is 
autarchy  workable  in  1933?  Can  fascism  succeed  where  its 
predecessors  have  failed?  Can  it  preserve  private  property 
and  privilege,  and,  in  a machine  era,  establish  stable,  self- 
sufficient  nations? 

Theoretically  the  answer  must  be  in  the  negative.  The 


FASCISM 


47 


forces  which  made  self-sufficient  national  economy  unstable 
in  the  past  are  present  in  modern  economic  life.  Profit, 
heaped  up  in  the  hands  of  the  ruling  class,  still  seeks  invest- 
ment. Traders  go  abroad  in  search  of  new  markets.  The 
demand  for  food  and  raw  materials  still  compels  every 
capitalist  nation  to  carry  on  business  activities  with  the  out- 
side world,  and  since  the  battleship  follows  trade,  colonial 
revolt  will  undermine  profit  economy  in  the  future  as  it  has 
undermined  it  in  the  past. 

The  forces  making  for  the  economic  inter-dependence  of 
nations  are  not  only  present  today  as  they  have  been  present 
in  the  past;  they  are  intensified  by  mass  machine-production 
and  mass  exploitation,  which  have  increased  the  volume  of 
surplus  and  speeded  the  drive  for  markets  and  for  supplies 
of  essential  raw  materials.  They  are  intensified  by  the  net- 
work of  steam,  electric  and  motor  transport  that  have 
brought  even  more  remote  portions  of  the  earth  into  such 
intimate  contact  with  world  affairs. 

Theory  denies  the  possibility  of  economically  self-sufficient 
twentieth  century  nations.  But  fascists  are  not  concerned 
with  theory.  They  act.  Theory  or  no  theory,  they  propose 
to  make  autarchy  work.  What  results  will  follow  from  such 
a policy? 

2.  The  implications  of  autarchy 

Wish,  will,  and  human  activity  do  not  prevent  economic 
laws  from  operating.  Men  may  obstruct  or  divert.  They 
cannot  do  away  with  the  flow  of  economic  forces  any  more 
than  engineers  can  do  away  with  the  Mississippi. 

Fascists  propose  to  establish  self-sufficient  nations.  Such 
attempts  are  subject  to  limitations  similar  to  those  which 
affect  the  proposal  to  free  the  Mississippi  Valley  from  floods. 
Can  flood-control  be  made  effective?  Can  the  fascists  attain 
their  goal?  And  if  they  can  attain  it,  what  price  must  they 
pay  for  their  success? 

The  attempt  to  establish  self-sufficient  nations  will  be  ac- 
companied and  followed  by  consequences  of  far-reaching 
importance  to  life  and  well-being.  These  consequences  may, 
for  convenience,  be  classed  under  two  main  heads:  economic 
and  political.  They  are,  of  course,  interdependent. 


48 


FASCISM 


a.  The  economic  implications  of  autarchy 

Any  attempt  to  establish  self-sufficient  national  economy  in 
the  fourth  decade  of  the  twentieth  century  raises  a number 
of  important  questions  which  may  be  briefly  and  concretely 
stated  in  the  form  of  a series  of  propositions: 

I.  Fascism  must  discover  an  area  in  which  economic  self- 
sufficiency  is  workable.  Modern  large-scale  profit 
economy  knows  no  such  area.  Unitary  nations  like 
Sweden;  federal  systems  like  the  United  States  of 
America;  aggregations  like  the  British  Empire,  are  all 
compelled  to  look  to  the  outside  world  for  markets, 
for  food,  for  raw  materials,  and  for  investment  oppor- 
tunities. From  the  smallest  to  the  largest:  from  the 
simplest  to  the  most  complex;  profit-economy  states 
are  inter-dependent,  and  not  self-sufficient. 

II.  The  search  for  a self-sufficient  economic  unit  will  lead 
the  fascists,  as  it  led  those  of  their  predecessors  who 
helped  to  liquidate  the  Roman  Empire,  to  a splitting 
up  of  economy  units  until  they  reach  the  village;  the 
manor;  and  the  local  market  town.  Village  economy 
is  almost  self-sufficient.  A complex  of  a score  of 
agricultural  villages  and  one  handcraft-trading  village 
relying  chiefly  upon  barter,  can  continue  practically 
independent  of  the  outside  world.  Short  of  this  level, 
however,  there  is  no  unit  which  can  pretend  to  eco- 
nomic self-sufficiency.  The  search  for  an  area  in 
which  economic  self-sufficiency  is  workable  leads 
straight  back  to  such  forms  of  village  economy  as  can 
be  found  today  in  portions  of  Central  Europe,  India 
and  China. 

III.  Autarchy  implies  the  abandonment  of  national  special- 
ization in  production.  No  longer  will  Britain  produce 
cotton  goods;  Germany,  chemicals;  and  the  United 
States,  typewriters  and  tractors  for  the  world  market. 
There  will  be  no  world  market.  Each  self-sufficient 
economic  area  will  make  up  its  own  textiles,  use  chem- 
icals sparingly  and  learn  to  do  without  typewriters 
and  tractors.  Mass  production  will  therefore  be  drast- 
ically restricted;  unit  production  costs  will  rise;  the 
variety  of  products  available  to  the  consumer  will  cor- 


FASCISM 


49 


respondingly  decline.  This  decline  will  be  progressive 
and  will  be  linked  with  a progressive  decrease  in  the 
standard  of  living. 

IV.  The  abandonment  of  national  specialization  will  go 
hand  in  hand  with  the  decline  of  international  trade. 
In  proportion  as  each  community  becomes  self-suffi- 
cient, it  will  cease  trade  with  its  neighbors.  Nation 
will  cease  to  trade  with  nation;  district  with  district; 
village  with  village,  until  a stage  is  reached  like  that 
of  the  Middle  Ages,  at  which  the  trade  of  the  world 
can  be  carried  on  the  backs  of  camels,  pack  horses 
and  human  beings,  or  in  a few  small  merchant  vessels. 
Brigands  will  infest  the  hills  and  pirates  will  scour  the 
seas.  Each  village,  manor,  market  town,  trader  and 
merchant  will  be  compelled  to  provide  for  his  own 
self-defense  and  protect  his  own  property.  Localism 
and  individualism  will  have  once  again  replaced  the 
efforts  at  social  co-ordination. 

V.  The  precious  metals  and  other  easily  transportable 
forms  of  property  will  be  universally  hoarded;  money 
will  disappear.  Each  household  will  be  in  the  main 
self-sufficient  and  its  few  outside  needs  can  be  met  by 
giving  goods  in  exchange  for  goods.  Money  economy 
will  once  more  give  place  to  barter  economy. 

VI.  Automatic  machinery  will  be  abandoned  with  the 
abandonment  of  mass  production.  The  village  will 
rely  on  hand-agriculture  and  hand-crafts.  Railroads  will 
disappear.  Roads  will  be  tracks  through  the  mud. 
Automobiles  will  vanish.  Bridges  will  be  destroyed  in 
the  course  of  the  constantly  recurring  wars  and  mil- 
itary expeditions  and  forays.  Pack  animals  defended 
by  private  guards  will  ford  the  streams  and  make  their 
way,  single  file,  over  narrow  winding  tracks.  If  this 
picture  seems  .fantastic  to  a modern  American  or 
European,  let  him  compare  Roman  imperial  economy 
in  50  A.D.  with  the  economy  of  the  same  territory  in 
650  A.D.  Rostovtzev  tells  the  story  with  a wealth 
of  detail  in  his  Social  and  Economic  History  of  the 
Roman  Empire,  tracing  with  particular  care  the  decay 
of  agriculture;  the  rise  in  taxes;  the  cessation  of  pro- 
duction; the  abandonment  of  trade;  the  crumbling  of 


50 


FASCISM 


imperial  economy  and  the  return  to  local  economy. 
Those  facts  are  today  unquestioned,  but  how  fantastic 
they  would  have  appeared  to  an  educated  citizen  of 
Augustan  Rome. 

VII.  Mass  wage-labor  will  disappear  with  the  disappearance 
of  specialized  mass  production.  Production,  other 
than  that  of  the  household,  will  be  carried  on  by  a few 
handcraft  workers.  The  modern  proletariat  will  be 
eliminated  by  war,  disease,  famine  and  the  flight  back 
to  the  land,  quite  as  effectively  as  the  proletariat,  and 
the  slave  masses  of  Imperial  Rome  were  eliminated  by 
the  same  means.  When  the  process  is  completed, 
there  will  be  no  proletariat.  Pittsburgh,  Detroit,  Man- 
chester, Birmingham,  Essen  and  Turin  will  be  sparsely 
settled  communities  with  small  handcraft  industries 
producing  chiefly  for  a local  market. 

VIII.  More  than  nine-tenths  of  the  people  in  such  a society 
will  make  their  living  directly  from  the  land.  (In 
parts  of  present-day  India  the  proportion  is  as  high  as 
98  per  cent).  The  trading  class  will  be  small.  Most 
trade  will  be  carried  on  directly  at  the  village  market 
or  at  the  country  fairs.  The  banker  will  be  a local 
money  lender.  The  engineer  will  be  a carpenter  and 
bricklayer.  The  doctor  wil  be  a barber-druggist.  The 
priest  will  be  school-teacher.  The  middle  class  will 
make  up  less  than  three  percent  of  the  population. 
In  the  great  centres  of  modern  specialized  industry, 
population  will  be  cut  down  by  two-thirds,  three-quar- 
ters, or  even  nine-tenths. 

IX.  The  standard  of  living  will  be  reduced  to  that  of  the 
villagers  in  present-day  Mexico,  China,  Austria  or 
Roumania,  except  that  the  villagers  will  no  longer  be 
able  to  secure  the  many  trinkets,  tools  and  utensils 
that  now  come  to  them  from  the  centres  of  specialized 
industrial  production.  Each  year  they  will  sow  their 
crops;  will  wait  for  the  rain;  and  when  the  rain  fails 
them,  they  will  die  like  flies  of  the  resultant  famine. 
Each  year  they  will  reap  their  harvests;  hide  them 
away  from  roaming  bands  of  brigands  and  unemployed 
soldiers;  huddle  about  their  meagre  fires  and  use  their 


FASCISM  51 

spare  time  in  making  and  repairing  household  tools 
and  utensils. 

Such  developments  cannot  be  completed  in  one  generation, 
and  probably  not  in  one  century.  But  however  slowly,  they 
follow  logically  and  inexorably  from  the  pursuit  of  a policy 
of  economic  self-sufficiency.  The  middle  class  will  have  won 
its  point.  Big  business  will  be  no  more.  The  proletarian 
revolution  will  have  been  wiped  out  with  the  elimination  of 
the  mass  wage-working  population.  As  for  the  middle  class 
— it  will  have  practically  disappeared  with  the  return  to  vil- 
lage economy. 

b.  The  political  implications  of  autarchy 

The  economic  changes  that  are  implied  in  a policy  of  self- 
sufficiency  will,  of  course,  have  their  consequences  in  the 
political  organization  of  fascist  society.  The  most  important 
of  these  consequences  will  be  the  rise  of  political  separatism 
and  localism. 

Fascist  spokesmen  talk  proudly  today  about  “Italy”  and 
“Germany”  as  though  there  were  some  magic  in  these  geo- 
graphic areas.  As  a matter  of  fact,  the  Italy  and  Germany 
of  today  are  only  about  half  a century  old.  And  even  during 
that  brief  period,  their  boundary  lines  have  been  extensively 
altered. 

Modern  Italy  and  Germany  were  hammered  together  dur- 
ing the  era  when  big  business  was  expanding  triumphantly 
and  profitably.  Now  that  the  decline  of  capitalist  imperial- 
ism has  set  in,  there  are  signs  of  political  disintegration  in 
practically  every  European  nation.  The  nation-state  of  today 
is  not  a workable  self-sufficient  area.  The  adoption  of  the 
principles  of  self-sufficiency  will  lead  each  local  economic 
area  to  set  up  its  own  local  political  organization. 

Examine  a map  of  Italy  or  of  Germany  in  1100  A.D.  Both 
were  split  into  hundreds  of  local  political  systems  corre- 
sponding more  or  less  with  local  economic  activities.  Indeed, 
each  village  unit;  each  landlord;  each  trading  centre  had 
something  approaching  its  own  independent  administration. 

During  the  centuries  of  its  greatness,  there  were  walls 
about  the  Romaa  Empire, — walls  defended  by  the  legions  in 
a thousand  remote  outposts.  Economic  life  was  unified. 
Roads  ran  everywhere.  The  seas  were  covered  with  ships. 


52 


FASCISM 


Trade  flourished.  People  travelled.  Brigandage  and  piracy 
were  practically  eliminated.  The  Roman  world  was  an  eco- 
nomic and  political  unit. 

As  the  Roman  Empire  broke  up,  the  walls  crumbled,  the 
bridges  were  destroyed;  the  roads  were  neglected;  brigands 
and  pirates  throve;  trade  languished.  The  walls  about  the 
empire  crumbled,  and  the  stones  were  used  to  wall  the  cities. 
With  the  disappearance  of  a centralized  administration  and  a 
unified  defense  force,  each  locality  administered  and  defended 
itself. 

Present  day  Europe  is  filled  with  reversions  to  separatism 
and  localism.  National  boundary  lines  multiply.  Tariff  walls 
rise.  Arbitrary  restrictions  hamper  trade  and  prevent  migra- 
tion. Each  of  the  petty  states  created  by  the  Peace  Treaty 
of  1919  is  building  its  own  political  and  military  machine. 
Another  general  war,  with  its  consequent  disintegration,  will 
push  the  process  still  further.  Empires  and  nations  will  be 
dismembered,  as  was  Austria  in  1919.  , Local  populations, — 
in  Catalonia,  Bavaria,  and  the  Italian  Tyrol,  will  declare  their 
independence  of  Madrid,  Berlin  and  Rome.  Geographic  sub- 
division will  continue  as  each  economic  group  seeks  to  pre- 
serve and  defend  its  own  local  interests  against  taxation,  ex- 
ploitation, and  seizure. 

The  process  is  not  confined  to  Europe.  China  is  splitting 
up.  Regional  wars  and  revolutions  are  a day-to-day  occur- 
rence in  Latin  America.  The  exploited  colonies  are  striving 
hard  to  break  the  bonds  that  tie  them  to  the  tribute-collect- 
ing empires.  The  doctrines  of  self-sufficiency  and  local  au- 
tonomy are  not  academic  issues.  They  are  already  being  put 
into  practice  over  great  sections  of  the  world. 

c.  How  far  can  autarchy  go? 

The  movement  toward  local  economic  self-sufficiency  and 
political  independence  which  is  sweeping  western  Europe, 
Asia  and  the  Americas  is  subject  to  certain  important  limita- 
tions inherent  in  the  present  historical  situation: 

I.  The  difficulty  of  confining  a machine  economy,  with  its 
accompanying  facilities  for  quick  transport  and  commu- 
nications, within  small  geographic  areas. 

II.  Working  class  and  middle  class  opposition  to  the  lower 
standards  of  living  that  are  inevitable  under  a self-suffi- 
cient local  economy. 


FASCISM 


53 


III.  The  leadership  furnished  by  the  proletarian  revolution- 
ary movement  in  each  capitalist  country  to  the  discon- 
tented middle  class  and  the  rebellious  working  masses. 

IV.  The  superior  strategic  position  which  Soviet  Eurasia 
will  occupy  if  it  retains  and  expands  modern  science  and 
technique  at  the  same  time  that  Fascist  Europe  aban- 
dons them. 

V.  The  inevitable  diffusion  of  culture  from  the  higher 
soviet  culture  level  to  the  lower  fascist  culture  level. 

Such  social  forces  are  a brake  on  autarchy  that  will  operate 
with  increasing  intensity  as  the  fascist  world  moves  farther 
and  farther  below  the  levels  of  expanding  communism. 

3.  The  historic  role  of  fascism 

The  part  which  individuals  or  social  groups  play  in  tht 
historic  process  is  not  necessarily  self-selected.  Frequently 
it  is  quite  unconscious.  It  therefore  is  not  important,  from 
the  historic  standpoint,  to  know  what  the  fascists  think  they 
are  doing,  or  where  their  followers  believe  they  are  going. 
The  vital  question  concerns  the  historic  role  which  fascism 
is  actually  playing.  Hitler  may  be  right  when  he  asserts 
that  he  is  founding  a new  social  order  in  Central  Europe. 
Mussolini  may  be  a true  prophet  when  he  declares  that 
Italian  Fascism  will  last  for  a hundred  years.  For  the 
German  and  Italian  masses,  however,  the  real  question  is 
not  whether  fascism  is  a new  and  enduring  social  order,  but 
what  kind  of  a world  it  will  produce. 

Will  the  wage-workers  find  employment  and  decent  living 
conditions  under  fascism?  Will  they  be  able  to  live  at  all? 
What  will  happen  to  the  general  standard  of  living?  Can 
fascism  promise  a better  life  to  more  people  than  capitalist 
imperialism  provided?  Where  is  fascism  leading  the  Euro- 
pean masses — not  to-morrow,  or  next  week,  but  through  de- 
cades, generations  and  centuries? 

If  the  analysis  presented  in  this  study  is  at  all  correct,  the 
historic  role  of  fascism  is  unmistakable.  The  fascists  are 
leading  Europe  back  to  village  economy, — back  to  the  dark 
ages. 

a.  The  era  of  fascism 

The  recent  history  of  Western  European  society  may  be 
simplified  and  summarized  in  this  form: 


54  FASCISM 

1750-1870 — The  expansive  energies  of  capitalism  were  directed 
toward  the  destruction  of  feudalism  and  the  build- 
ing of  a profitable  form  of  national  economy. 
Britain  led  this  movement,  and  supplemented  a 
profitable  national  economy  by  a profitable  world 
empire. 

1870-1910 — Other  capitalist  nations,  following  the  lead  of 
Great  Britain,  attempted  to  build  a profitable  im- 
perial economy  through  a competitive  struggle  for 
world  markets,  resources  and  investment  opportu- 
nities. 

1910-1920 — The  structure  of  imperial  economy  and  of  inter- 
national economy  was  torn  to  pieces  by  the  colo- 
nial revolt,  imperial  war,  economic  crises  and 
proletarian  revolutions  that  accompanied  the  im- 
perial struggle  for  world  supremacy. 

1920-1933 — The  propertied  and  privileged  elements  in  western 
European  society  attempted  to  establish  or  to 
strengthen  national  frontiers  and  to  build  behind 
them  self-sufficient  units  of  profit  economy  cap- 
able of  surviving  the  collapse  of  capitalist  im- 
perialism. 

The  era  of  fascism  (1920-date)  viewed  in  this  perspective, 
is  an  era  of  rear-guard  actions.  The  most  advanced  form 
of  profit  economy — capitalist  imperialism — has  met  its  Water- 
loo; has  crumpled  up  under  the  growing  strain  of  surplus 
capital,  under  the  impact  of  the  War  of  1914,  under  the  pres- 
sure of  colonial  revolt  and  proletarian  revolution.  The  prop- 
ertied and  privileged  in  every  capitalist  state,  realizing  that 
the  field  of  capitalist  imperialism  is  no  longer  tenable,  are 
making  frantic  efforts  to  draw  off  their  forces;  to  stave  off 
world  revolution;  to  move  back,  in  orderly  fashion,  to  a new 
line  of  defense:  the  self-sufficient  nation. 

b.  Back  to  the  dark  ages 

Once  this  retreat  is  well  under  way  however  it  will  not 
stop  with  national  economy.  That  position  is  even  less  tena- 
ble than  the  imperial  one.  Its  possibilities  were  exhausted 
in  the  middle  of  the  nineteenth  century.  The  modern  means 
of  machine  production  outgrew  the  national  economic  area 
before  1870. 


FASCISM 


55 


The  retreat  of  the  propertied  and  the  privileged  will  there- 
fore continue  beyond  national  economy  to  a third  position: 
economic  localism.  Italy,  Spain,  Germany,  France  and  Great 
Britain  will  prove  too  large.  Self-sufficiency  can  be  estab- 
lished far  more  successfully  in  smaller  areas.  Sicily,  Lom- 
bardy, Catalonia,  the  Rhineland,  Normandy,  Provence,  Ire- 
land, Wales  and  Scotland  will  break  away  from  the  present 
nation  states. 

But  even  in  these  areas,  self-sufficiency  is  impossible. 
Hence  profit  economy  will  be  forced  back  to  a fourth  posi- 
tion: to  the  agricultural  village,  with  its  hand  labor  in  the 
fields  and  its  hand-crafts  in  the  shops,  with  its  narrow  out- 
look, it  rudimentary  household  organization  and  its  pre- 
carious standard  of  living. 

The  fascists  did  not  begin  the  retreat  from  capitalist  im- 
perialism, nor  are  they  responsible  for  its  direction.  The  re- 
treat is  a major  historic  movement  following  the  exhaustion 
of  the  possibilities  contained  in  the  highest  form  of  profit 
economy. 

The  fascists  were  thrown  to  the  surface  of  this  movement. 
During  the  retreat  of  the  imperialists,  theirs  were  the  forces 
that  offered  the  most  ample  protection  to  property  and  privi- 
lege in  the  innumerable  rear-guard  actions.  This  fact  ex- 
plains why  the  leading  fascists  are  so  often  don-quixotic  ad- 
venturers like  d’Annunzio  and  so  frequently  soldiers  of  for- 
tune like  Hitler,  Pilsudsky  and  Mussolini. 

The  fascists  did  not  begin  the  retreat  of  profit  economy. 
They  did  not  determine  its  direction,  nor  can  they  check  it  at 
will.  The  movement  back  will  continue  until  its  flank  is  turned 
by  the  working  masses  and  a general  advance  is  begun  to- 
ward a higher  social  order.  Otherwise,  profit  economy  must 
once  more  disintegrate  to  the  stability,  security  and  static 
life  of -a  society  built  upon  village  economy.  If  unchecked, 
the  retreat  must  continue  to  this  point  because  between  the 
unstable  forms  of  capitalist  imperialism  and  the  rudimentary, 
stable  forms  of  village  economy,  profit  economy  has  never 
found  a stopping  place. 

c.  An  historic  perspective 

This  fascist  role  of  leadership  back  toward  village  economy, 
localism  and  the  dark  ages  appears  much  more  clearly  in  .the 
longer  perspective.  It  is  evident  that  imperial  economy  is 


56 


FASCISM 


being  abandoned  in  the  retreat  toward  the  self-sufficient  na- 
tion. When  the  nation  can  no  longer  shelter  the  retreating 
forces  of  profit  economy,  they  must  seek  a new  line  of  de- 
fense at  a still  lower  economic  level. 

The  problem  of  the  general  line  of  profit  economy  retreat 
raises  the  question  of  the  major  economic  trend.  Like  the 
cycle  of  business  prosperity,  recession,  depression  and  revival, 
and  the  cycle  of  national  birth,  growth,  maturity,  decay  and 
death,  the  imperial  cycle  passes  through  a rhythm  whose  high 
points  and  low  points  are  separated  by  centuries.  The  first 
two  diagrams  printed  on  page  4 show  the  structure  and 
movement  of  modern  profit  economy.  The  third  is  an  at- 
tempt to  portray  certain  aspects  of  that  imperial  cycle  as  it 
has  appeared  in  western  Europe  during  the  past  twenty-five 
centuries. 

Two  thousand  years  ago  Europe  passed  through  the  Ro- 
man imperial  cycle.  Like  the  modern  world,  the  Roman 
world  was  begun  at  the  level  of  village  economy.  It  passed 
through  long  periods  of  city  and  of  national  economy  and 
through  a brief  era  of  imperial  economy.  Then  the  reverse 
process  set  in,  and  the  Roman  empire  retreated  from  im- 
perial economy,  through  the  nation  and  the  city  back  to 
village  economy  and  the  localism  of  the  Dark  Ages.  In  Ro- 
man times  it  was  the  “barbarians”  who  led  or  forced  the 
backward  movements.  Today  the  leadership  is  in  the  hands 
of  the  fascists.  However  “civilized”  the  Blackshirts  may  ap- 
pear in  comparison  to  the  barbaric  hordes,  history  will  credit 
them  with  being  the  grave-diggers  of  capitalist-imperialism. 

By  opposing  big  business  and  by  smashing  the  proletarian 
revolution,  the  fascists  qualify  as  wreckers.  By  leading 
western  Europe  back  toward  village  economy  and  localism, 
they  qualify  as  the  grave-diggers  and  pall-bearers  of  western 
culture. 

Fascist  leaders  may  not  be  conscious  of  the  role  that  they 
are  playing.  Neither  were  the  barbarians  conscious  of  their 
historic  function  as  the  house-wreckers  of  the  Roman  world. 
But  consciously  or  unconsciously,  in  their  efforts  to  save  the 
remnants  of  profit  economy,  fascists  are  following  a path 
which  has  only  one  possible  outlet, — village  economy,  local- 
ism, and  the  annihilation  of  modern  science  and  technique. 


FASCISM 


57 


4.  Fascism  or  communism 

The  fascists  are  following  lines  of  economic  and  social 
policy  that  will  result  in  the  abandonment  of  automatic  ma- 
chinery and  machine  technique;  that  will  wipe  out  specialized 
production;  that  will  restore  the  hand  economy  of  the  vil- 
lage; that  will  raze  the  industrial  and  trading  cities  and  deci- 
mate the  population  of  the  western  world.  Linked  with 
every  reactionary  element  in  present  day  society — the  landed 
interests,  peasant  proprietorship,  the  small  tradesmen,  craft 
industry,  the  church, — fascism  directs  the  retreat  of  profit 
economy. 

The  fascists  cannot  employ  modern  technique.  They  do 
not  propose  to  do  so.  Instead  they  advocate  and  practice  a 
return  to  hand  agriculture,  village  industry  and  a self-suffi- 
cient economy.  With  the  abandonment  of  technique,  experi- 
mental science  based  so  largely  upon  the  demand  for  tech- 
nique, will  shrivel  up.  Its  decay  will  be  hastened  by  its  long- 
time enemy, — the  sworn  foe  of  experimentation  and  inquiry, 
— the  authoritarian  Roman  Catholic  Church. 

The  fascists  are  leading  the  western  world  back  from  those 
unworkable  forms  of  imperialism  and  internationalism  which 
were  built  beyond  the  boundary  lines  of  individual  states, 
while  wealth  and  ruling  class  authority  remained  centered 
within  national  boundaries.  The  fascists  are  pursuing  this 
policy  as  the  spokemen  for  propertied,  privileged  elements 
that  cannot  make  use  of  the  advances  scored  by  modern 
science,  and  that  are  willing  to  wreck  the  entire  social  struc- 
ture rather  than  surrender  their  out-worn  system  of  profit 
economy. 

Fascism  to  the  masses  means  a continued  life  under  a de- 
caying social  order,  with  the  insecurity  that  accompanies 
chronic  unemployment;  with  wages  cut  so  low  that  living 
standards  fall  below  the  level  of  physical  starvation;  with 
war;  with  the  growing  corruption  of  a putrescent  social 
organism.  For  the  masses,  especially  the  proletarian  masses, 
fascism  is  the  way  of  death. 

The  masses  have  only  one  way  out  of  the  world  crisis, — 
the  way  of  the  proletarian  revolution.  If  they  organize;  if 
they  unite;  if  they  take  over  economic  and  political  power, 
they  will  be  able  to  utilize  science  and  technique  in  the  work 
of  socialist  construction.  They  will  be  able  to  build  a com- 
munist society  on  the  basis  of  a socialized,  planned  world 


58 


FASCISM 


economy.  Thus  and  thus  only  can  they  hope  to  escape  the 
annihilation  to  which  the  fascists  are  leading  them.  Thus 
and  thus  only  can  they  fulfill  their  historic  mission, — to  en- 
large the  life  opportunities  of  the  human  race. 

The  choice  is  clear:  Fascism  or  Communism;  Rome  or 
Moscow. 

The  middle  classes  and  many  members  of  the  ruling  class 
are  choosing  Rome  as  the  likeliest  means  of  preserving  their 
property  and  privileges.  They  are  following  the  lead  of 
Rome  because  Rome  promises  the  security,  discipline  and 
authority  without  which  their  property  and  privilege  must 
speedily  be  lost. 

The  working  masses,  with  equal  determination,  are  turn- 
ing toward  Moscow.  They  see  in  the  proletarian  revolution 
their  only  means  of  escape  from  poverty  and  exploitation. 
They  see  in  socialist  construction  the  only  answer  to  social 
decay  and  mass  starvation. 

Socialization  spells  an  end  to  private  property  in  capital 
goods.  Collectivization  in  agriculture  draws  the  curtain  on 
the  system  of  peasant  proprietorship.  Unit  economic  plan- 
ning eliminates  the  small  tradesman  and  manufacturer.  The 
dictatorship  of  the  proletariat  marks  the  end  of  bourgeois 
institutions  and  bourgeois  society.  Only  communism  grasps 
the  newest  technical  achievements,  socializes,  plans,  and 
through  its  appeal  to  the  proletarian  masses,  strives  to  estab- 
lish a world  economy  based  on  guaranteed  livelihood  and 
the  socialization  of  leisure  and  opportunity. 


BOOKS  ON  FASCISM 


AVARNA  DI  GUALTIERI,  CARLO.  II  Fascismo.  Torino: 
Gobetti  1925. 

BALABANOVA,  ANGELICA.  Wesen  und  Werdegang  des 
Italienischen  Faschismus.  Wien:  Hess  1931. 

BARNES,  JAMES  STRACHEY.  Fascism.  London:  Butter- 
worth  1931. 

The  Universal  Aspects  of  Fascism.  London:  Williams 
and  Norgate  1928. 

BERNHARD,  LUDWIG.  Der  Staatsgedanke  des  Faschis- 
mus. Berlin:  Springer  1931. 

BERRY,  FRANCOIS.  Le  Fascisme  en  France.  Paris:  Li- 
braire  de  THumanite  1926. 

BONOMI,  IVANOE.  Du  Socialisme  au  Fascisme.  Paris: 
Spes  1924. 

BARTOLOTTO,  GUIDO.  Lo  Stato  e la  Dottrina  Cor^ora- 
tiva.  Bologna:  Zamichelli  1931. 

BRANDT,  KARL,  and  others.  Autarkie.  Berlin:  Rowohlt 
1932. 

BUOZZI,  BRUNO  and  Nitti,  V.  Fascisme  et  Syndicalisme. 
Paris:  Valois  1930. 

CHIURCO,  GIORGIO  ALBERTO.  Storia  della  Rivoluzione 
Fascista.  Firenze:  Vallecchi  1929. 

CICCOTTI,  ETTORE.  II  Fascismo  e le  sue  Fasi.  Milano: 
Unitas  1925. 

CRESSWELL,  CLARICE  M.  The  Keystone  of  Fascism. 
London:  Besant  1929. 

EPSTEIN,  JULIUS.  Das  Schicksal  der  Akkumulation  in 
Deutschland  oder  der  Irrsinn  der  Autarkie.  Leipzic: 
Kelter  1932. 

ESCHMANN,  ERNST  WILHELM.  Der  Faschistische  Staat 
in  Italien.  Breslau:  Hirt  1930. 

FANTINI,  ODDONE.  La  Politica  Economica  del  Fascismo. 
Roma:  Tiber  1929. 

FERRARI,  FRANCESCO  LUIGI.  Le  Regime  Fasciste  Ita- 
lien. Paris:  Spes  1928. 

GENTILE,  GIOVANNI.  Fascismo  e Cultura.  Milano:  Fra- 
telli  Treves  1928 

Origini  e Dottrina  del  Fascismo.  Roma:  Libreria  del 
Littorio  1929. 

GORGOLINI,  PIETRO.  Le  Fascisme.  Paris:  Nouvelle  Li- 
braire  Nationale  1923. 

HAIDER,  CARMEN.  Capital  and  Labor  Under  Fascism. 
New  York:  Columbia  University  Press  1930. 


HEINRICH,  WALTER.  Die  Staats  und  Wirtschaftsverfass- 
ung  des  Faschismus.  Berlin:  Verlag  fur  Nationalwirt- 
schaft  und  Werksgemeinschaft  1929. 
INTERNATIONAL  CENTRE  OF  FASCIST  STUDIES. 

A Survey  of  Fascism.  London:  Benn  1928. 

KURELLA,  ALFRED.  Mussolini  ohne  Maske.  Berlin:  Neuer 
Deutscher  Verlag  1931. 

LACHMANN,  LUDWIG  M.  Fascistischer  Staat  und  ICor- 
porative  Wirtschaft.  Charlottenburg:  Hoffman  1930. 
LANDAUER,  CARL  and  HONEGGER,  HANS,  editors. 

Internationaler  Faschismus.  Karlsruhe:  Braun  1928. 
LIST,  FRIEDERICH.  The  National  System  of  Political 
Economy.  New  York:  Longmans  Green  1904. 
MARSCHAK,  JACOB.  Der  Ivorporative  und  der  Hierar- 
chische  Gedanke  in  Fascismus.^  Tubingen:  Archiv  fur 
Sozialwissenschaft  Bd  52/53  1924. 

PENNACHIO,  ALBERTO.  The  Corporative  State.  New 
York:  Italian  Historical  Society  Publications  No.  4 1927. 
POR,  ODON.  Fascism.  London:  Labour  Pub.  Co.  1923. 
PREZZOLINI,  GIUSEPPE.  Fascism.  London:  Methuen 
1926. 

PUCHETTI,  A.  CORRADO.  II  Fascismo  Scientifico.  Tori- 
no: Bocca  1926. 

REUPKE,  HANS.  Unternehmer  und  Arbeiter  in  der  Faschi- 
stischen  Wirtschaftsidee.  Berlin:  Hobbing  1931. 

Das  Wirtschaftssystem  des  Faschismus.  Berlin.  Hobbing 
1930. 

ROCCO,  ALFREDO.  La  Trasformazione  dello  Stato.  Ro- 
ma: La  Voce  1927. 

SALVEMINI,  GAETANO.  The  Fascist  Dictatorship  in 
Italy.  New  York:  Holt  1927. 

SCHNEIDER,  HERBERT  W.  Making  the  Fascist  State. 

New  York:  Oxford  University  Press  1928. 
SCHNEIDER,  HERBERT  W.  and  CLOUGH,  SHEPARD 
B.  Making  Fascists.  Chicago:  University  of  Chicago  Press 
1929. 

SILLANI,  TOMASO,  editor.  What  is  Fascism  and  Why. 
London:  Benn  1931. 

TRENTIN,  SILVIO.  L’Aventure  Italienne.  Paris:  Presses 
Universitaires  de  France  1928. 

Les  Transformations  Recentes  du  Droit  Public  Italien. 
Paris:  Giard  1929. 

VALOIS,  GEORGE.  Le  Fascisme.  Paris:  Valois  1927. 
VAN  LEISEN,  HERBERT.  Explication  du  Fascisme.  Paris: 
Cahiers  de  la  Quinzaine,  series  16,  no.  12  1926. 
VILLARI,  LUIGI.  The  Awakening  of  Italy.  London:  Me- 
thuen 1924. 

VOLPI,  GIUSEPPE.  The  Financial  Reconstruction  of  Italy. 
New  York:  Italian  Historical  Society  Pub.  No.  3 1927. 


V 


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THE  COAL  QUESTION 

Some  reasons  why  it  is  pressing 
and  some  suggestions  for  solving  it 

33  S' 4- 

By  HU  p 

SCOTT  NEARING  v 


Published  by 

THE  RAND  SCHOOL  OF  SOCIAL  SCIENCE 

7 East  15th  Street 
New  York 


JUST  OUT 


VOLUME  II 


THE 

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1917-1918 

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ments. 

PUBLISHED  ANNUALLY 

by 

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RAND  SCHOOL  OF  SOCIAL  SCIENCE 

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conditions. 

Among  the  contributors  are  the  following: 

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The  Coal  Question 

Some  reasons  why 
it  is  pressing  and 
some  suggestions 
for  solving  it. 


By 

SCOTT  NEARING 


RAND  SCHOOL  OF  SOCIAL  SCIENCE 
7 East  15th  Street 
New  Yark 


Copyright,  1918 
by 

Rand  School  of  Social  Science 
7 East  15th  Street 
New  York 


CONTENTS 


Introduction.  The  Coal  Scuttle 

1.  Coal  for  Whom? 

2.  Nature's  Coal  Supply 

3.  A Trial  for  Private  Ownership.. 

4.  How  It  Worked 

5.  What  Happened  to  the  Consumer 

6.  The  Fate  of  the  Worker 

7.  The  Mine  Owner 

8.  The  Results  of  One  Strike 

9.  The  Coal  Crisis 

10.  An  Object  Lesson  in  Monopoly.. 

11.  The  Way  Out 

12.  The  Promise  of  Socialism 


3 

'j 

'i 


PAGE 

,.  5 

..  7 

..  8 
..  9 

..  13 
..  15 
..  19 
..  22 
..  26 
..  31 
..  37 
..  41 
..  45 


INTRODUCTION 


THE  COAL  SCUTTLE 

They  lie  there  in  the  scuttle — the  big,  ugly  chunks  of 
blackness — unlovely  as  the  day  they  were  wrenched  from 
nature’s  bosom  at  the  face  of  Old  Number  Six  heading. 
Yet  they  draw  men  to  them  like  diamonds, — black  diamonds, 
— precious,  and  so  rare  that  during  December,  1917  and 
January,  1918  men  lied  for  them;  women  wept  for  them; 
children  stole  for  them. 

They  lie  there  in  the  scuttle — the  beautiful,  wonderful 
black  diamonds  for  which  human  beings  will  abandon  their 
moral  code,  foreswear  their  faith,  and  do  things  that  no  man 
dreamed  of  until  he  found  himself  in  the  depths  of  winter, 
with  the  thermometer  falling,  the  snow  flying,  the  house  chill- 
ing, the  children  wailing  and  the  scuttle  empty  of  its  magic 
contents.  They  are  teachers  of  wisdom  these  black  dia- 
monds, for  during  the  past  winter  there  were  millions  who 
learned  things  that  they  had  never  known  until  the  lesson 
was  frozen  into  their  memories. 

They  lie  there  in  the  scuttle — black  diamonds — one  of 
nature’s  choicest  and  freest  gifts  to  man.  Under  the  hills  the 
black  diamonds  are  packed — mile  upon  mile,  awaiting  the 
labor-magic  that  shall  call  them  from  their  long  resting 
place. 

Under  the  hills  they  lie — in  such  abundance  that  for  years 
to  come,  no  family  in  the  United  States  need  suffer  for  lack 
of  them. 


There  is  coal  in  America — coal  for  all,  and  to  spare. 

There  are  families  by  the  hundred  thousand  eager  to  buy 
coal,  that  they  may  retain  their  hold  upon  health  and  life. 

Yet  millions  suffer,  freeze,  sicken,  die, — all  for  the  want  of 
the  thing  which  has  been  so  freely  provided. 

Why  is  this  ? 

Nature  has  blessed  this  country  with  an  abundance  of 
this  warmth-giver — coal.  Why  then  should  the  people 
perish  for  the  lack  of  it? 

Is  the  matter  hard  to  explain  ? 

No,  the  answer  is  easy ! 

The  black  diamonds  in  the  scuttle  are  calling  a message 
to  the  American  people, — “Men  need  coal ; nature  has  placed 
it,  ready  at  hand;  you  have  tried  out  a method  of  handling 
the  coal — private  ownership;  that  method  has  robbed  the 
consumer,  exploited  the  worker,  enriched  the  owner,  and 
at  the  last  hurled  you  into  the  devastating  coal  crisis  of  the 
last  winter.  You  have  tried  and  failed.  Try  again! 
Special  privilege  and  monopoly  have  not  succeeded  and  could 
not  succeed.  But  there  is  another  way  out.  Mine  the  coal 
and  distribute  it,  not  for  private  profit,  but  for  the  health 
and  life  of  the  people !” 

Listen  further  to  the  message  that  the  black  diamonds 
have  been  teaching  during  these  past  years, — “Awake ; arise ; 
throw  aside  the  old  things ; quicken  with  the  new.  You  have 
had  your  lesson.  Re-read  it!  Learn  it  by  heart!  Men 
everywhere  are  weary  of  privilege,  weary  of  great  wrongs 
entrenched  in  high  places — profitably  entrenched  for  the  ex- 
ploiting of  the  multitude.  The  empty  scuttle  is  a symbol  of 
the  misery  that  has  been  and  is;  the  scuttle  well  filled  is  a 
symbol  of  the  comfort,  joy  and  gladness  that  shall  be  when 
men  have  learned  the  lesson  that  the  black  diamonds  are 
teaching.,, 

This  is  the  lesson, — “Coal!  Coal!  Coal  for  the  people!” 


6 


" 1.  COAL  FOR  WHOM  ? 

Coal  for  whom? 

That  is  the  question  at  issue. 

Under  the  hills  are  billions  of  tons  of  coal, — some  in  thin 
and  some  in  thick  veins;  hard,  medium  and  soft  coal;  real 
coal  and  stone-coal;  slate-coal  and  clean  coal.  Coal  by  the 
billions  of  tons  is  deposited  under  the  hills. 

Coal  for  whom? 

Surely,  surely,  for  those  who  need  it  to  keep  themselves 
warm. 

Upon  what  other  basis  can  society  exist  ? How  else  shall 
men  live  and  labor  together  in  joy,  unless  he  who  is  hungry 
is  fed;  he  who  is  naked,  clothed;  and  he  who  is  chilled  to 
the  marrow  is  warmed  by  every  agency  that  society  can 
muster  to  warm  him  ? 

“From  each  according  to  his  abilities ; to  each  according 
to  his  needs”  is  a noble  motto,  upon  which  the  new  world- 
society  of  justice  and  brotherhood  will  be  built. 

When  the  day  comes  that  society  is  managed  wisely,  we 
shall  go  out  into  the  highways  and  the  by-ways  and  compel 
them — men,  women  and  especially  the  children^-to  be  warm. 
There  is  no  other  way  in  which  society  may  do  its  duty  by 
its  own.  There  is  no  other  method  by  which  a people  may 
defend  itself  against  the  embruited  mind  that  crouches  in  a 
shivering  body. 

Coal  for  the  needy,  the  suffering,  the  shivering  brothers 
of  men  who  stand  on  the  outskirts  of  life  and  reach  them- 
selves shrinkingly  forward  toward  the  warmth  that  radiates 
from  the  center  of  a well-managed,  society. 

“Liberty,  equality,  fraternity,”  cried  the  French  Revolu- 
tionists. And  the  greatest  of  these  is  fraternity. 

How  better  can  you  judge  of  the  fraternity  of  a people 
than  by  the  way  in  which  they  pass  on  the  warmth  of  life 
to  needy  brothers?  By  the  way  in  which  they  use  their 
coal? 


7 


America!  America!  carrying  the  doctrines  of  democracy 
— of  liberty,  equality,  fraternity — across  the  high  seas — how 
is  it,  America,  with  your  coal  ? Have  you  used  it  to  promote 
liberty,  equality,  fraternity  at  home  or  have  you  used  it  for 
something  else  ? 

Men  and  women,  citizens  of  the  great  Republic  of  the 
West,  we  are  being  judged  by  the  way  in  which  we  have 
used  our  coal — and  by  the  acts  of  our  own  hands  we  are 
being  condemned. 

We  believe  in  liberty.  We  are  laboring  to  establish  de- 
mocracy. We  have  tried— tried  in  the  case  of  our  coal — and 
in  that  case  we  hav.e  failed  mightily.  Why  ? 

Let  us  see. 


2.  NATURE’S  COAL  SUPPLY 

During  certain  months  of  the  year,  coal  is  as  important  as 
bread  to  millions  of  American  families. 

The  people  who  live  in  the  northern,  eastern  and  north 
central  states  depend  largely  for  their  domestic  fuel  supply 
upon  hard  coal  or  anthracite  which  comes,  largely,  from  five 
counties  in  the  northeastern  part  of  Pennsylvania.  There  is 
no  other  anthracite  coal  of  importance  now  being  mined  in 
the  United  States.  The  entire  anthracite  industry  is  there- 
fore concentrated  in  one  small  section  of  one  state.  To 
that  one  small  area  millions  look  for  their  fuel  supply. 

When  anthracite  mining  began,  a century  and  a half  ago, 
the  Pennsylvania  region  contained  approximately  19, 000,- 
000,000  tons  of  coal.  Since  that  time,  the  amount  taken 
from  the  mines,  or  made  unavailable  by  the  abandonment  of 
old  workings  is  equal  to  about  5,000,000,000  tons,  leaving  an 
estimated  reserve  of  14,000,000,000  tons. 

Experts  figure  that  25  per  cent  of  the  coal  can  still  be  se- 
cured from  old  mines  and  that  50  per  cent  of  the  coal  can 


s 


be  had  from  the  new  mines.  The  total  available  supply  of 
anthracite  is  therefore  about  8,000,000,000  tons.1 

Taking  the  amount  actually  mined  as  a standard,  it  appears 
that  the  coal  still  in  the  mines  is  equal  to  seven  times  the 
amount  of  the  product  to  date  and  that  the  coal  that  can  be 
made  available  for  consumption  is  equal  to  four  times  the 
production  to  date. 

Coal  is  needed  for  the  people.  Fourteen  billion  tons  of 
hard  coal  lie  unmined  in  one  part  of  one  state.  How,  then, 
shall  this  coal  be  taken  where  it  is  needed  ? 

That  is  the  problem  which  society  faces  in  the  case  of  all 
of  the  gifts  which  nature  has  bestowed  upon  man, — “By 
what  means  can  nature’s  bounty  best  be  converted  into  hu- 
man joy?” 

Through  the  ages  men  have  struggled  with  that  ques- 
tion. Through  the  ages  a very  few  have  taken  possession 
of  the  good  parts  of  the  earth  upon  which  all  depend  for  a 
living,  and  because  of  this  fact  they  have  been  able  to  exploit 
and  enslave  their  fellows.  As  a nation  disposes  of  its  nat- 
ural resources,  so  it  disposes  of  the  life  and  happiness  and 
liberty  of  its  people.  A study  of  the  manner  in  which  the 
American  people  have  handled  their  hard  coal  deposits, 
throws  a flood  of  light  upon  their  ability  to  follow  the  path 
that  leads  toward  democracy. 

3.  A TRIAL  FOR  PRIVATE  OWNERSHIP 

Natural  resources  may  be  owned  by  individuals  or  by  the 
whole  group  of  people  who  live  together  and  use  the  prod- 
ucts from  the  resources.  Both  plans  have  been  tried  in  the 
past.  Both  plans  have  been  tried  in  America.  The  har- 
bors and  navigable  rivers  have  been  kept  as  a common  pos- 


1 The  figures  on  which  these  statements  are  based  will  be  found  in 
“Increase  in  Prices  of  Anthracite  Coal,”  House  Document  No.  1442, 
62nd  Congress,  Third  Session,  p.  126. 


9 


session  of  the  people.  Almost  all  of  the  other  resources, 
including  coal  deposits,  have  been  placed  in  private  hands. 

Our  forefathers  thought  that  private  ownership  would 
lead  to  opportunity.  They  failed  to  see  in  it  the  seeds  of 
monopoly. 

The  early  colonists  accepted  a system  of  private  ownership 
of  natural  resources.  They  had  fled  from  the  tyranny  of 
landlord-dominated  Europe,  with  an  abiding  dread  in  their 
hearts  of  the  oppression  which  grew  out  of  a concentration 
of  wealth  control  in  the  hands  of  a small  ruling  class.  They 
had  lived  for  generations  in  or  near  European  countries 
which  were  suffering  from  the  burden  of  a landed  aristocracy 
which  was  able  to  exercise  formidable  power  over  all  of  the 
institutions  of  society. 

These  early  colonists  demanded  equal  opportunity  relig- 
iously and  politically,  because  the  weight  of  feudal  oppres- 
sion had  been  felt  in  church  and  state.  At  that  time  there 
was  no  clear  idea  abroad  regarding  the  importance  of  the 
economic  forces  behind  church  and  state.  They,  in  them- 
selves, were  looked  upon  as  the  cause  of  oppression,  and 
the  early  settlers  declared  their  liberation  from  both.  _ Men 
in  the  new  world  were  to  be  free  and  were  to  have  equal 
opportunity. 

The  colonists  believed  that  the  remedy  for  landlord  despo- 
tism clearly  lay  in  the  direction  of  individual  ownership. 
“Give  a man  the  possession  of  a barren  rock,”  cried  one 
of  the  champions  of  this  movement,  “and  he  will  convert  it 
into  a garden.”  Acting  upon  this  theory,  the  early  Amer- 
ican colonies  granted  to  a man  and  his  heirs  forever  the 
possession  of  those  pieces  of  land  for  which  he  could  secure 
clear  title. 

This  plan  of  individually  owned  natural  resources  suc- 
ceeded well  in  a new  country.  For  every  tree  that  was  pre- 
empted, a score  stood  waiting  the  next  claimant;  for  every 
acre  of  land  that  had  been  fenced,  there  were  a hundred  still 
untilled  and  unsowed.  The  hills  abounded  in  wealth,  the 


10 


streams  were  full  of  power.  In  the  early  days  the  forest, 
the  rivers  and  the  sea  yielded  a bountiful  supply  of  wild 
animals  which  provided  food  and  clothing.  All  of  these 
things  might  be  had  for  the  taking,  and  to  no  one  might 
they  be  denied,  because  each  man  could  get  them  for  himself. 

With  the  ending  of  the  Nineteenth  Century  the  free  land 
in  the  United  States  vanished.  Long  before  that  time,  the 
best  of  the  natural  resources  had  been  labeled  “mine”  by 
relatively  small  groups  of  powerful  industrial  and  financial 
interests. 

The  private  ownership  of  natural  resources  was  a scheme 
that  was  devised  to  stimulate  thrift,  energy  and  ambition. 
It  was  intended  to  give  an  opportunity  for  life,  liberty  and 
the  pursuit  of  happiness. 

Each  change  in  economic  conditions  gives  rise  to  new 
needs  and  new  relations.  Social  forms  are  modified  because 
the  basis  for  life  is  altered.  Two  generations  ago  the  coun- 
try’s adjustment  to  life  included  a safety  valve  in  the  form 
of  a frontier.  The  frontier  meant  cheap  grazing  land,  free 
agricultural  land,  free  timber  and  free  minerals.  Today 
each  first-class  piece  of  land  in  the  United  States  has  its 
price. 

Sooner  or  later  the  American  public  must  decide  whether 
a system  of  private  property  in  natural  resources  can  work 
advantageously  after  free  land  disappears.  Up  to  the  point 
where  land  ownership  carried  with  it  no  monopoly  power, 
many  legitimate  justifications  could  be  urged  in  its  favor. 
Now  that  private  property  in  land  almost  inevitably  carries 
with  it  the  power  to  lay  a monopoly  tax  upon  the  industry 
of  the  community,  the  situation  takes  on  a very  different 
aspect. 

All  returns  which  come  from  land,  because  of  its  location 
or  because  of  its  natural  fertility  in  soil,  minerals  or  other 
resources,  are  monopoly  returns.  Much  of  the  return  on 
anthracite  coal  falls  in  this  class. 


11 


The  supply  of  anthracite  coal  in  the  United  States  is  very 
limited.  The  demand  for  it  is  widespread.  The  owner  of 
anthracite  coal  land  can  set  a price  that  will  represent  the 
difference  betweea  competitive  conditions  and  the  consoli- 
dated ownership  of  the  anthracite  coal  field. 

Anthracite  land  owners  have  monopoly  power  because 
they  own  the  anthracite  land.  They  have  clinched  this 
monopoly  power  by  concentrating  the  ownership  of  the  many 
acres  of  anthracite  land  in  the  hands  of  a very  few  people. 

The  continent  is  so  arranged  geologically  that  for  every 
acre  of  anthracite  land  there  are  4,000,000  acres  of  land  that 
do  not  contain  anthracite.  This  geologic  fact  places  great 
monopoly  power  in  the  hands  of  every  anthracite  owner. 
Add  to  this  the  successful  business  ventures  that  have  cul- 
minated in  the  concentration  of  the  anthracite  acres  under 
the  control  of  a very  small  group  of  interests,  and  the  monop- 
oly picture  is  complete. 

The  fact  that  there  is  only  one  acre  of  anthracite  land  for 
each  4,000,000  acres  of  other  land  means  that  the  chances 
for  competition  are  comparatively  small.  Concentrate  the 
ownership  of  all  the  anthracite  acres  in  a few  hands,  and  the 
possibility  of  competition  vanishes. 

The  anthracite  problem  as  it  stands  today,  may  be  sum- 
marized in  these  terms.  A valuable  natural  resource,  local- 
ized in  one  small  geographic  area,  is  depended  upon  by  mil- 
lions of  consumers  and  by  tens  of  thousands  of  workers. 
For  years  this  resource  has  been  the  object  of  constant  pub- 
lic attention.  The  consumers  have  clamored  against  high 
prices ; the  workers  have  demanded  higher  wages  and  better 
conditions  of  labor.  Meanwhile  the  owners  of  the  resource 
have  been  actively  engaged  in  efforts  to  increase  their  profits. 

The  attempts  of  the  owners  of  the  coal  fields  to  secure 
larger  profits  have  culminated,  since  1898,  in  a combination 
which  has  virtual  control  of  coal  lands,  coal  mines  and  coal- 


12 


carrying  railroads.  The  coal  land  owners  have  thus  put 
themselves  in  control  of  the  means  of  marketing  as  well  as 
the  resource  and  the  means  of  producing  coal. 

Here  is  a resource  privately  owned.  The  ownership  of 
the  resource,  as  well  as  of  the  means  of  developing  and 
marketing  it,  are  concentrated  under  the  control  of  one  group 
of  interests. 

What  better  object  lesson  could  the  American  people  have 
of  the  effects  upon  all  parties  concerned  of  the  private  owner- 
ship of  a natural  resource? 

4.  HOW  PRIVATE  OWNERSHIP  WORKED 

After  several  unsuccessful  efforts  to  “get  together”  the 
owners  of  the  anthracite  fields  at  length  succeeded,  in  1898, 
in  forming  an  effective  organization,  popularly  known  as  the 
“coal  trust.” 

Since  1898  the  co-operation  between  anthracite  carriers 
and  operators  has  been  very  complete.  Professor  Jones  1 
ascribes  this  co-operation  to  “railroad  consolidation”;  “the 
development  of  a community  of  interest  among  the  rail- 
roads”; and  “the  practical  elimination  of  the  independent 
operators.”  (P.  59.) 

The  Erie  Railroad,  early  in  1898,  purchased  a controlling 
interest  in  the  New  York,  Susquehanna  and  Western  Rail- 
road. The  purchase  was  effected  by  means  of  a large  Erie 
stock  issue,  the  shares  of  which  were  exchanged  for  Susque- 
hanna Railroad  stock.  The  purchase  was  carried  out  by 
the  Erie  in  order  to  remove  the  danger  of  competition  which 
the  rapid  development  of  the  Susquehanna  threatened. 

The  movement  toward  railroad  consolidation  received  a 
great  impetus  through  a purchase  by  the  Reading  Company, 


1 “The  Anthracite  Coal  Combination,”  Eliot  Jones,  Harvard  Uni- 
versity Press,  1914. 


13 


which  was  the  holding  company  of  the  Philadelphia  and 
Reading  Railway  Company,  and  of  the  Philadelphia  and 
Reading  Coal  and  Iron  Company,  of  a controlling  interest 
in  the  Central  Railroad  of  New  Jersey.  Court  proceedings 
and  bankruptcy  had  compelled  the  Reading  interests  to  relin- 
quish their  former  hold  on  the  Jersey  Central.  .The  obsta- 
cles to  consolidation  were  removed  by  the  purchase  in  1901 
of  1^5,000  Central  of  New  Jersey  shares  (53  per  cent  of  the 
total  outstanding  stock)  at  $160  per  share. 

The  price  paid  for  the  Jersey  Central  stock  was  high,  as 
compared  with  market  quotations,  but  “the  combination  of 
the  two  railroads  placed  nearly  one-third  of  the  total  ship- 
ments of  coal  under  the  control  of  the  Reading  Company.” 
For  the  future  the  advantage  was  even  greater,  because  the 
Jersey  Central  owned  the  second  largest  reserve  supply  of 
coal.  Through  the  acquisition  of  this  reserve,  “the  Reading 
System  owned,  and  controlled  about  63  per  cent  of  all  the 
unmined  coal  in  the  state  of  Pennsylvania.”  (Jones,  page 
62.) 

These  transactions  placed  the  Reading  in  a position  of 
supreme  importance.  Holding  nearly  two-thirds  of  the 
available  supply  of  unmined  anthracite,  and  with  a third  of 
the  annual  shipments  from  the  anthracite  regions,  the  Read- 
ing interests  were  in  a position  to  exert  a great  influence 
over  the  anthracite  industry. 

The  movement  toward  combination  was  furthered  by  a 
large  extension  of  control  by  a number  of  other  railroads 
over  coal  companies  and  coal  lands.  These  developments 
placed  under  the  direct  control  of  the  coal  carriers  the  un- 
mined anthracite  and  the  machinery  of  production.  They 
already  owned  the  means  of  transportation.  The  control 
was  thus  made  absolute,  from  mine  to  consumer. 

Harmony  in  the  anthracite  coal  fields  has  been  furthered 
by  the  establishment  of  a greater  degree  of  common  interest 
among  the  railroads.  This  has  been  made  possible  through 


14 


the  interownership  of  stock  and  through  interlocking  direc- 
torates. 

Another  important  factor  in  the  development  of  an  effec- 
tive anthracite  combination  has  been  the  elimination  of  inde- 
pendent operators.  This  has  been  done  in  two  ways : first, 
by  purchase;  second,  by  the  general  establishment  of  per- 
centage contracts. 

The  private  ownership  of  the  hard  coal  fields  led — as  pri- 
vate ownership  of  resources  always  has  led — to  the  concen- 
tration in  the  hands  of  a very  few  people  of  all  of  the  most 
valuable  hard  coal  deposits.  The  process  took  time.  When 
it  was  ended,  however,  the  business  of  hard  coal  produc- 
tion, from  the  mine  to  the  consumer,  had  passed  under  one 
control. 

Private  ownership  of  resources  was  tried  as  a step  in  the 
direction  of  liberty.  Its  first  effect  was  the  establishment  of 
an  iron-clad  monopoly. 

Did  monopoly  make  for  liberty? 

That  question  can  best  be  answered  by  examining  the 
effects  that  monopoly  has  had  on  the  consumer  of  the  prod- 
uct, on  the  worker  who  brings  the  product  into  being,  and 
on  the  owner  of  the  resource.  The  facts  and  figures  used 
to  explain  the  effects  of  the  hard  coal  monopoly  will  all  be 
drawn  from  the  period  before  1914,  when  the  war  unsettled 
all  economic  conditions. 


5.  WHAT  HAPPENED  TO  THE  CONSUMER 

The  Bureau  of  Labor  at  Washington  publishes  figures 
showing  the  increase  in  the  wholesale  price  of  anthracite 
coal  since  1890.  In  that  year  chestnut  sold  at  $3.35  per 
ton ; egg  at  $3.61  per  ton ; and  stove  at  $3.71  per  ton.  Dur- 

15 


ing  the  subsequent  years  prices  ranged  over  a wide  field. 
They  were  lowest  in  1895  and  highest  in  1913.  This  holds 
true  of  each  of  the  different  grades  of  coal. 

The  increase  in  the  price  of  chestnut  has  been  greater  than 
that  of  any  other  size.  This  is  explained  by  the  rapidly 
growing  demand  for  chestnut  as  a kitchen  fuel.  The  whole- 
sale price  in  1890  was  $3.35;  in  1913,  $5.31.  Egg  advanced 
in  price  from  $3.61  to  $5.06;  stove  advanced  from  $3.71  to 
$5.06. 

The  extreme  fluctuations  in  the  prices  of  these  prepared 
sizes  of  anthracite  coal  occurred  prior  to  1898.  Since  that 
time  there  has  been  an  upward  movement  most  rapid  in  the 
case  of  chestnut  and  least  rapid  in  the  case  of  stove  coal. 
The  movement  is  not  the  less  effective  in  all  cases. 

Previous  to  the  combination  of  1898,  the  price  of  hard 
coal  was  subject  to  very  much  the  same  extremes  of  varia- 
tion that  may  be  noted  in  the  price  of  soft  coal.  Thus, 
chestnut  coal  was  $3.35  in  1890;  $4.17  in  1893;  $2.98  in 
1895.  The  price  of  egg  coal  was  $3.03  in  1895 ; $3.80  in 
1897 ; $3.37  in  1899.  After  1898  fluctuations  disappear  and 
the  climb  of  prices  for  all  grades  is  consistent  and  regular. 

There  has  been  a great  deal  of  comment  regarding  the  cost 
of  coal  production. 

Many  consumers  believe  that  the  miner  receives  a major 
part  of  the  $9  which  they  are  called  upon  to  spend  for  a 
ton  of  coal.  They  have  been  told  repeatedly  by  the  coal 
companies  that  if  the  wages  of  the  miners  are  raised,  let  us 
say  10  per  cent,  a corresponding  increase  must  be  made  in 
the  price  of  the  product  in  order  to  recompense  the  coal  com- 
panies for  the  increased  cost  of  production.  As  a matter 


16 


of  fact,  the  mining  costs  constitute  a comparatively  small 
element  in  the  price  of  a ton  of  coal. 

Company  A,  cited  on  page  97  of  the  Federal  Report  on 
Anthracite  Prices,  is  described  as  “one  of  those  whose  oper- 
ating costs  have  most  largely  increased  during  the  period 
under  consideration.,,  In  1904,  according  to  the  figures* 
the  cost  of  coal  at  the  colliery  was  $2,046;  in  1912,  the  cost 
was  $2,215.  In  other  words,  in  1912,  the  8,671,013  tons  of 
anthracite  coal  produced  by  this  company  cost,  on  the  aver- 
age, $2.22  at  the  mine.  The  company  reported  in  that  year 
a total  of  27,463  employees.  The  $9-ton  of  stove  coal  pur- 
chased by  the  consumer  in  New  York  or  Philadelphia  actu- 
ally cost  the  coal  mining  company  a little  over  $2. 

A number  of  items  enter  into  the  cost  of  coal.  The  actual 
mining,  or  cutting  and  loading  coal,  cost  in  1912,  54  cents. 
Other  labor  costs  inside  the  mine  included  the  costs  of  main- 
taining roadway,  of  ventilation,  of  repairs,  of  pumping,  of 
“general  expenses,”  “extraordinary  expenses,”  “improve- 
ments,” bring  the  total  labor  cost  up  to  $1,309.  In  short,  the 
actual  cost  of  mining  the  coal  and  putting  on  the  cars  in  the 
mine  is  only  about  two-fifths  of  the  labor  cost  inside  the 
mine.  Supplies,  machinery  and  miscellaneous  costs  bring 
the  cost  of  coal  inside  the  mine  to  $1,674.  Outside  the  mine, 
the  labor-costs  are  $0,419  and  the  net  outside  cost  $0,541. 
Inside  and  outside  costs  combined  give  the  total  labor  cost 
on  the  ton  of  coal  as  $1,728,  and  for  all  costs  $2,215. 

This  illustration  is  only  one  of  a number  of  instances,  de- 
clared in  the  report  to  be  typical.  Costs  have  risen  some- 
what since  the  report  was  made — perhaps  twenty  or  twenty- 
five  per  cent.  The  facts  are  startling  enough,  nevertheless. 


17 


The  consumer  who  pays  $9  for  a ton  of  stove  coal  dis- 
tributes his  money  somewhat  as  follows : 1 


Retailer  

N. 

...  $2.50 

> $2.50  Retailer 

Ton  of 

Stove 

Coal 

| $9  ■ 

Freight  

...  $2.00  | 

l $2.00  Freight 

Mine  Profit 

Cost  of  Selling 

...  $1.40  N 
...  $0.10 

J>  $1.50  Operator 

Mine  Up-keep 

...  $0.70 " 

Other  Labor 

...  $1.60 

> $3.00  Mine  Cost 

Mining 

...  $0.70 

The  figures  in  the  foregoing  diagram  are  necessarily  esti- 
mates. They  will  vary  from  one  mine  to  another  and  from 
one  part  of  the  anthracite  field  to  another.  They  are  typical 
rather  than  specific,  yet  they  give  a rough  idea  of  the  way 
in  which  the  price  paid  for  a ton  of  coal  is  divided  among 
the  different  parties  at  interest  in  its  production. 

The  entire  cost  of  the  coal  on  the  cars,  ready  for  ship- 
ment from  the  mines,  is  only  one-third  of  the  price  paid  by 
the  consumer,  pf  this  mine  cost,  only  a quarter  goes  to  the 
man  who  does  the  mining.  All  other  labor  costs,  including 
the  cost  of  keeping  the  mine  in  repair  and  the  labor  costs  of 
improving  the  property,  insofar  as  the  mine  can  be  im- 
proved, are  equal  to  $1.60. 

The  miner,  including  every  form  of  mine  labor,  gets  only 
one-fourth  of  the  amount  paid  by  the  consumer  for  the  coal. 


18 


The  mine  operators  and  the  railroads  together  get  the 
lion’s  share  of  the  money  paid  by  the  consumer  for  his  coal. 
Mine  profit,  selling  cost  and  railroad  freight  rate  cover  $2.85, 
or  two-fifths  of  the  price  of  the  coal  to  the  consumer.  This, 
it  should  be  remembered,  is  secured  by  the  coal  owners  and 
carriers  after  the  cost  of  keeping  up  the  mines  (except  taxes, 
interest  and  other  fixed  charges)  have  been  charged  against 
mine  costs.  The  amount  taken  by  the  operator  and  the  rail- 
road is  greater  than  the  entire  labor  cost  of  each  ton  of  coal, 
or  even  than  the  total  mine  cost  of  the  coal. 

Prices  have  risen  steadily.  There  is  nothing  to  show  that 
these  price  increases  were  justified  by  the  increasing  costs 
of  production,  yet  the  consumer  has  been  called  upon  to  pay 
the  bill. 

6.  THE  WORKER 

A visitor  to  the  hard  coal* fields  would  never  suspect  that 
the  workers  there  were  occupied  in  developing  one  of  the 
richest  of  American  resources.  Only  three  minerals  and 
fuels- — pig-iron,  copper  and  bituminous  coal — exceed  hard 
coal  in  the  annual  value  of  their  product,  while  the  value 
of  the  hard  coal  mined  each  year  is  twice  the  value  of  the 
gold  and  four  times  the  value  of  the  silver  mined  annually  in 
the  United  States. 

The  anthracite  miner  is  therefore  working  in  a region 
which,  from  a standpoint  of  natural  advantage,  is  extremely 
rich;  in  an  industry  which  produces  a valuable  and  highly 
marketable  commercial  product ; under  the  control  of  a num- 
ber of  splendidly  organized  railroads  which  work  in  sub- 
stantial harmony.  All  of  the  advantages  accruing  from  a 
modern  business  organization  engaged  in  the  development 
of  a highly  advantageous  resource  should  be  met  with  in 
the  anthracite  region.  If  there  is  any  industry  in  the  United 
States  which  should  contain  a rich  promise  of  advantage  for 
its  workers,  it  is  the  anthracite  coal  industry ; yet  the  visitor 


19 


to  that  region  is  brought  face  to  face  with  conditions  of 
hardship  that  probably  are  not  exceeded  by  those  in  any 
other  industrial  community  of  equal  size  in  the  northeastern 
section  of  the  United  States.1 

An  examination  of  the  facts  shows  that  anthracite  labor 
seems  to  enjoy  no  particular  advantage  because  of  the  fact 
that  it  is  employed  by  a highly  organized  industry  in  the 
production  of  an  immensely  valuable  commercial  product. 
In  other  words,  the  benefits  which  must  necessarily  accrue 
from  the  peculiar  advantages  of  the  anthracite  business  do 
not  accrue  to  the  anthracite  workers. 

The  anthracite  worker  is  not  paid  at  a higher  rate  than  the 
workers  in  other  forms  of  mining.  A comparison  between 
the  wages  of  the  Pennsylvania  bituminous  and  the  Pennsyl- 
vania anthracite  miners  shows  that  the  workers  in  the  bitu- 
minous mines,  as  a group,  earn  a higher  return  than  the 
anthracite  miners.  The  figures  published  by  the  United 
States  Census  permit  a rough  comparison  to  be  made  be- 
tween the  wages  of  the  anthracite  miners  and  the  wages  of 
miners  in  all  of  the  other  mining  industries  of  the  country. 
Here  again  the  wages  of  the  anthracite  workers  are  among 
the  lowest.  The  “contract  miners”  in  the  anthracite  mines, 
who  make  up  less  than  a quarter  of  the  total  men  employed, 
are  paid  at  a relatively  high  rate.  However,  the  wages  of 
the  “miners  laborers”;  “other  inside  men”;  “outside  work- 
men” ; and  “breaker  employees”  are  relatively  low. 

There  is  no  evidence  to  show  that  the  wages  of  the  anthra- 
cite workers  are  higher  than  the  wages  of  workers  in  other 
mining  industries.  On  the  contrary,  there  are  facts  which 
suggest  that,  if  anything,  the  wages  of  anthracite  workers 
are  lower,  in  certain  particulars,  than  the  wages  of  some 
other  miners. 


1 For  a description  of  the  anthracite  region,  see  “Anthracite  Coal 
Communities,”  Peter  Roberts,  1904;  “The  Coal  Miners,”  F.  J.  Warne, 
1905 ; and  “The  Coal  Miner,”  E.  A.  Sailers,  1912. 


20 


Much  of  the  argument  before  the  Coal  Strike  Commis- 
sion was  intended  to  show  that  the  coal  mining  industry  is 
an  industry  of  peculiar  risk,  and  that  those  who  take  up  the 
work  of  coal  mining,  being  employed  in  a . particularly  haz- 
ardous industry,  should  be  paid  in  proportion  to  the  hazards 
involved.  The  Commission  summed  up  its  opinion  regard- 
ing the  hazards  of  the  anthracite  industry  by  stating:  “We 
find  that  it  should  be  classed  as  one  of  the  dangerous  indus- 
tries of  the  country,  ranking  with  several  of  the  most  dan- 
gerous.” 

As  far  as  the  relative  wages  of  anthracite  miners  and 
other  workers  in  occupations  of  a similar  grade  are  con- 
cerned, it  would  seem  that  the  balance  is  in  favor  of  the 
workers  in  other  occupations.  Despite  the  high  risks  of 
mining,  most  other  occupations  employing  men  in  large  num- 
bers pay  higher  wages  or  wages  equally  high.  When  a 
comparison  is  made  between  anthracite  and  occupations  of 
equal  risk,  like  the  railroad  industry,  the  evidence  is  over- 
whelmingly against  anthracite  wages. 

The  figures  show  that  anthracite  wages  differ  little  from 
wages  in  other  industries  that  are  operated  under  similar 
conditions.  If  there  is  any  difference,  it  is  against  the  an- 
thracite mine  worker.  This  same  point  might  have  been 
argued  deductively  in  view  of  the  fact  that  in  the  United 
States,  as  in  any  other  open  labor  market,  wages  are  fixed  by 
the  laws  affecting  the  entire  labor  world,  and  not  specifically 
for  any  industry. 

The  prospective  anthracite  miner  must  choose  between 
working  in  an  anthracite  or  in  a bituminous  mine ; between 
working  as  a contract  miner  or  as  a track  layer;  between 
working  in  the  mines  and  working  in  a grocery  store;  be- 
tween working  in  a mine  and  handling  baggage  for  a local 
express  company.  The  same  grade  of  work,  all  other  things 

* “Report  of  the  Anthracite  Coal  Strike  of  1902.”  Washington, 
Government  Printing  Office,  1903,  p.  51. 


21 


being  equal,  will  pay  about  the  same  rate  of  return  in  any  one 
of  a group  of  neighboring  industries.  The  common  laborer 
in  a certain  district  is  paid  $2.50  per  day  whether  he  spikes 
down  rails  for  the  railroads  or  shovels  gravel  for  the  local 
contractor.  In  many  cases,  the  existence  of  unions  fixes  the 
rate  of  wages.  In  any  case,  the  laws  of  the  labor  market  or 
the  rules  of  the  unions  make  a rate  for  labor,  not  for  the 
particular  industry  in  which  the  person  is  employed,  but  for 
the  kind  of  work  he  is  doing. 

This  being  true,  no  one  is  surprised  to  find  that  the  anthra- 
cite miner  is  paid  a wage  approximately  the  same  as  the 
wages  of  other  men  doing  similar  work. 

Both  fact  and  logic  point  to  the  conclusion  that  the  anthra- 
cite miner  enjoys  no  particular  economic  advantage  because 
he  is  an  anthracite  miner.  The  fact  that  he  is  employed  on 
a wonderfully  rich  natural  resource  yields  him  no  addi- 
tional income.  He  receives  no  share  at  all  in  the  prosper- 
ity which  goes  with  natural  resource  monopoly. 


7.  THE  MINE  OWNER 

The  hard  coal  business  has  always  been  profitable  to  the 
mine  owners  in  two  senses.  First,  the  product  has  a wide 
market  that  has  been  growing  steadily  from  year  to  year, 
Second,  in  the  case  of  this,  as  of  any  other  resource  lying 
under  the  ground,  the  owner  may,  and  frequently  does, 
strike  it  rich. 

There  were  lean  years  for  the  mine  owners  before  they 
learned  to  stand  shoulder  to  shoulder  in  their  modern  com- 
bination ; but  since  the  formation  of  the  anthracite  coal 
“trust”  in  1898,  the  business  has  paid.  Even  in  hard  years 
the  dividends  have  been  generous  and  regular. 

The  men  behind  the  combination  of  1898  saw  that  the 
chief  thing  necessary  for  the  financial  prosperity  of  the 


22 


anthracite  fields  was  a higher  price  for  anthracite  products. 
Between  1898  and  1903  this  higher  price  became  a reality. 
The  movement  in  the  price  of  stove  coal  illustrates  the  point. 

The  figures  show  astonishingly  sudden  changes.  The 
price  was  at  $4.19  in  1893  and  at  $3.13  in  1895.  By  1897 
the  price  was  up  to  $4.01.  When  the  fact  is  borne  in  mind 
that  these  are  wholesale  prices  in  a staple  product,  some  idea 
can  be  formed  of  the  instability  of  the  anthracite  business 
during  those  hard  years. 

Stove  coal  prices  touched  rock  bottom  in  1895  ($3.13). 
The  combination  of  1898  found  prices  at  the  level  they  had 
occupied  in  1890  ($3.71),  when  the  Reading  interests  were 
attempting  to  control  the  field. 

Under  the  impetus  of  the  Combination  of  1898,  prices  rose 
from  $3.80  in  1898  to  $4.82  in  1903.  At  that  figure  they 
continued  until  1912. 

The  anthracite  combination,  through  concerted  action,, 
increased  the  price  of  coal  between  1898  and  1903  by  an 
amount  sufficient  to  yield  handsome  earnings,  dividends  and 
surpluses.  Take  a single  illustration: 

“The  report  of  the  Lackawanna  Railroad  for  1903  showed 
a net  profit  on  the  sale  of  coal  of  over  $3,000,000.  This  was 
85  per  cent  greater  than  its  profits  in  1901.  When  asked  be- 
fore the  Interstate  Commerce  Commission  whether  he  at- 
tributed ‘that  gain  of  85  per  cent  in  profit  very  largely  to 
the  excess  of  the  new  price  over  the  increased  cost  of  min- 
ing/ President  Truesdale  answered:  ‘That  has  considerable 
to  do  with  it,  of  course/  ” (Jones,  p.  158.) 

Another  way  in  which  profits  may  be  judged  is  in  the 
increase  of  dividends. 

The  production  of  coal  was  increasing.  In  the  years  from 
1895  to  1899  the  total  production  of  anthracite  varied  from 
41,637,864  tons  (1897)  to  47,665,204  (1899).  In  1897  the 
mines  worked  only  150  days;  in  1899,  173  days.  Between 


23 


1900  and  1904  the  production  moved  up  from  45,000,000 
to  57,000,000  tons ; the  days  of  operation  from  166  to  200. 
Note  how  this  increase  of  27  per  cent  in  production  com- 
pares with  the  increase  in  dividends. 

The  year  1898  shows  dividends  as  follows: 


Central  Railroad  of  New  Jersey 4 per  cent 

Lackawanna  7 “ “ 

Delaware  and  Hudson 5 “ “ 

Pennsylvania  Railroad 5 “ “ 

Lehigh  Coal  and  Navigation  Company 4 “ “ 


By  1903  a transformation  had  occurred.  The  dividend 
of  the  Jersey  Central  rose  from  4 to  8 per  cent ; the  Delaware 
and  Hudson,  from  5 to  6 per  cent ; the  Pennsylvania,  from 
5 to  6 per  cent;  and  the  Lehigh  Coal  and  Navigation,  from 
4 to  6 per  cent.  The  next  year,  1904,  shows  a slight  increase 
in  dividends,  and  in  1905  the  dividends  declared  were  as 


follows : 

Reading  Company per  cent 

Central  Railroad  of  New  Jersey 8 “ “ 

Lehigh  Valley 4 “ “ 

Lackawanna 20  “ “ 

Delaware  and  Hudson 7 “ “ 

Pennsylvania  6 “ “ 

Ontario  4 “ “ 

Lehigh  Coal  and  Navigation  Company 8 “ “ 

Philadelphia  and  Reading 20  “ - “ 


In  1898  the  Reading  Company,  the  Lehigh  Valley,  and  the 
Ontario  had  declared  no  dividends.  The  dividend  situation 
in  1905  was  eminently  satisfactory. 

The  price  schedules  adopted  in  1903  proved  profitable, 
from  the  standpoint  of  dividends,  up  to  1912,  when  the  next 


24 


price  increase  occurred.  Thus  in  1911  the  dividend  rates 
were: 


Reading  Company 6 per  cent 

Central  Railroad  of  New  Jersey 12  “ “ 

Lehigh  Valley 10  “ “ 

Lackawanna 55  “ * 

Delaware  and  Hudson 9 “ u 

Pennsylvania  6 “ “ 

Ontario  2 “ H 

Lehigh  Coal  and  Navigation  Company..., 8 “ “ 

Philadelphia  and  Reading 15  “ “ 


The  story  told  by  the  dividend  rates  is  clear  and  emphatic. 
The  price  schedules  which  the  combination  of  1898  was  able 
to  establish  in  1903  proved  highly  remunerative  over  a series 
of  years,  some  of  which  were  prosperous  and  others  un- 
prosperous.  During  good  and  bad  years  alike  the  dividend 
payments  of  the  anthracite  roads  have  been  eminently  satis- 
factory from  the  standpoint  of  the  investor. 

For  the  year  1913  the  earnings  on  the  common  stock  of 
the  principal  anthracite  carriers,  after  the  payment  of  all 
•expenses,  including  fixed  charges  and  preferred  dividends, 
were : 1 


Reading  Company. 17.57  per  cent 

Central  Railroad  of  New  Jersey 26.73  “ “ 

Lehigh  Valley 16.90  “ “ 

Lackawanna 32.04  “ “ 

Delaware  and  Hudson 12.95  “ “ 

Pennsylvania  8.86  “ “ 

Erie  3.67  “ “ 

Ontario  2.08  “ 

Lehigh  Coal  and  Navigation  Company 8.93  “ “ 


1 “The  Anthracite  Coal  Combination,”  op.  cit p.  140. 


25 


The  last  normal  year  of  railroad  Operations  is  1913.  The 
business  conditions  in  that  year  were  below,  rather  than 
above,  those  of  the  ordinary  year.  The  war  conditions  pre- 
vailing during  1914  make  the  figures  for  that  year  distinctly 
non-representative. 

Measured  in  any  terms,  anthracite  profits  have  been  most 
generous  since  the  formation  of  the  combination  of  1898. 
Earnings,  dividends,  surpluses  and  stock  ratings  all  reflect 
the  prosperity  of  the  railroad  interests  that  control  the 
anthracite  industry.  During  the  past  fifteen  years,  whether 
times  were  prosperous  or  unprosperous,  the  anthracite  car- 
riers have  been  earning  most  substantial  returns  on  the  ; 
anthracite  business. 


8.  THE  RESULTS  OF  ONE  STRIKE 

The  evidence  presented  thus  far,  dealing  with  prices, 
wages  and  profits,  would  lead  to  the  general  conclusion  that 
the  operators  have  the  best  of  it.  The  consumers  are  paying 
more  for  their  product;  the  workers  are  fortunate  if  they 
keep  pace  with  the  rising  cost  of  living. 

The  most  complete  set  of  facts  bearing  on  the  relation 
between  increased  labor  costs  and  increased  prices  was  col- 
lected by  the  United  States  Bureau  of  Labor  in  1912.1 
There  was  a suspension  of  work;  a sharp  price  increase  in 
many  sections,  based  on  coal  shortage;  and  a final  settle- 
ment that  gave  the  miners  10  per  cent  more  wages,  while  it 
abolished  the  sliding  scale,  and  raised  the  price  of  coal  about 
25  cents  per  ton.  The  case  is  typical  of  the  relations  between 
labor,  capital  and  the  consumer  of  anthracite. 


1 “Increase  in  Prices  of  Anthracite  Coal  following  the  Wage 
Agreement  of  May  20,  1912.”  Prepared  under  the  direction  of  the 
U.  S.  Commissioner  of  Labor  by  Basil  M.  Manly.  House  Docu- 
ment 1442,  62d  Congress,  3d  Session.  A remarkably  clear  and  de- 
tailed presentation  of  the  case. 


26 


After  a suspension  lasting  six  weeks,  an  agreement  was 
signed,  May  20,  1912,  under  which  the  wages  of  the  miners 
were  increased,  the  price  of  coal  was  raised  and  the  oper- 
ators reaped  a rich  harvest,  of  increased  net  profits. 

Following  their  agreement  with  the  workers,  the  oper- 
ators increased  the  wholesale  prices  of  coal  an  average  of 
25.82  cents  per  ton. 

The  consumer  was  an  unqualified  loser  in  the  events  sur- 
rounding the  1912  settlement.  Wholesale  prices  were  in- 
creased about  25  cents  per  ton  and  retail  prices  were  in- 
creased from  25  to  50  cents  per  ton.  In  this  case,  as  in 
many  that  have  preceded  and  that  will  follow  it,  the  con- 
sumer is  called  upon  to  foot  the  bill. 

No  sooner  had  the  operators  granted  the  increase  in  wages 
in  the  agreement  of  May  20,  1912,  than  they  issued  a circular 
prescribing  increases  in  wholesale  prices  varying  with  the 
size  of  the  coal.  The  prepared  sizes  (including  chestnut 
and  larger  sizes)  were  increased  an  average  of  31.23  cents 
per  ton.  The  price  of  pea  and  the  smaller  steam  sizes  of 
coal  was  increased  16.14  cents  per  ton. 

The  prepared  sizes  are  consumed  principally  in  domestic 
use,  while  the  steam  sizes  are  used  by  the  manufacturers 
and  owners  of  apartment  houses,  office  buildings  and  other 
public  structures.  'The  reason  for  placing  the  larger  in- 
crease on  the  prepared  sizes  is  said  by  the  coal  operators  to 
be  due  to  the  inability  to  sell  the  steam  sizes  in  competition 
with  bituminous  coal  at  any  greater  advances  than  those 
which  were  made.”  1 

The  decision  of  the  operators  to  increase  the  price  of  do- 
mestic sizes  31  cents  at  the  same  time  that  they  increased 
the  price  of  steam  sizes  16  cents  deserves  consideration. 
From  the  moment  it  was  decided  that  the  miners  should 
have  an  increase  in  wages,  the  operators  began  casting  about 


1 “Increase  in  Prices  of  Anthracite  Coal,”  op.  cit.,  p.  57. 


27 


for  a means  of  saddling  the  increase  on  the  consumers  of 
coal.  Here,  as  in  any  other  case  of  monopoly  power,  the 
rule  on  which  prices  are  fixed  is  found  in  the  famous  rail- 
road axiom,  “all  that  the  traffic  will  bear.,,  The  price  is 
therefore  fixed  at  the  highest  profitable  point.  Had  the 
prices  of  the  steam  sizes  been  raised  more  than  16  cents,  the 
users  of  these  sizes  would  have  abandoned  anthracite  in 
favor  of  bituminous  coal.  The  16-cent  increase  represented 
the  limit  of  the  operators’  power  in  that  direction. 

Although  it  is  impossible  to  determine  accurately  the  in- 
creased burden  placed  upon  the  consumer  by  the  strike  of 
1912,  it  is  the  Bureau  of  Labor  estimate  that  the  increase  in 
prices  and  the  suspension  of  discounts  alone  forced  the  con- 
sumer to  pay  $13,450,000  more  for  his  coal  at  1912  prices 
than  he  had  been  compelled  to  pay  at  1911  prices.  This  ad- 
ditional expenditure  of  $13,500,000  brought  not  one  iota  of 
benefit  to  the  consumers.  Indeed,  it  is  accompanied  in 
many  cases  by  inconvenience  and  dissatisfaction.  The  $13,- 
500,000  of  added  cost  bought  the  same  number  of  tons  of 
coal,  containing  the  same  number  of  heat  units  and  prepared 
under  the  identical  conditions. 

The  consumer  paid  the  entire  bill  incident  to  the  1912  price 
increase.  He  was  forced  to  add  more  than  $13,000,000  to 
the  cost  of  his  coal.  It  seems  evident  that  someone  must 
have  profited  considerably  by  the  transaction,  and  the  general 
supposition  is  that  that  someone  was  the  mine  worker. 

Oddly  enough,  and  public  opinion  notwithstanding,  the 
mine  worker  seems  to  have  gained  comparatively  little  by  the 
1912  agreement.  Indeed,  it  undoubtedly  represented  a net 
loss  for  him,  as  compared  with  his  position  in  1903.  The 
mine  worker  certainly  cannot  be  accused  of  getting  the  lion’s 
share  of  the  price  increase.  Only  a little  more  than  one- 
third  of  it  came  his  way.  The  Bureau  of  Labor  reports 
that  “a  careful  computation  based  on  the  records  of  one  of 
the  largest  companies  shows  that  the  increase  in  labor  cost 


28 


resulting  from  the  agreement  of  1912  and  the  readjustment 
of  the  wages  of  men  not  covered  by  the  agreement,  amounted 
to  9.75  cents  per  ton.”  1 At  the  same  time,  it  will  be  remem- 
bered that  coal  prices  increased  on  the  average  more  than  25 
cents  per  ton. 

The  mine  worker  did  benefit  immediately  and  directly  by 
the  strike.  The  advance  in  wages  which  the  abolition  of 
the  sliding  scale  and  the  increase  of  10  per  cent  over  the 
wage  of  1903  provided,  gave  an  increase  of  5.6  per  cent  in 
wage  rates.  Estimating  the  amount  of  this  increase  upon 
the  basis  of  the  shipments  from  June  to  December,  1912,  the 
miners  gained  about  $4,000,000.  Against  this  amount  there 
must  be  placed  the  cost  of  the  strike  in  money  and  in  priva- 
tion. 

The  miners’  demands  for  1912  included  a 20  per  cent  in- 
crease in  wages.  They  actually  received  a net  increase  of 
5.6  per  cent.  What  did  this  mean  to  them  in  comparison 
with  the  increased  cost  of  living  during  the  same  period  of 
years  ? 

The  United  States  Department  of  Labor  shows,  in  Bulle- 
tin 140,  that  the  cost  of  food  increased  30.8  per  cent  between 
1903  and  1912.  During  the  same  years  the  cost  of  clothing, 
shoes  and  the  like  increased  approximately  20  per  cent. 
While  no  extensive  study  has  been  made,  it  seems  that  the 
cost  of  rent  in  the  anthracite  fields  has  increased  during  the 
same  time  from  10  to  20  per  cent.  Figuring  the  food  as 
two-fifths  of  the  workingman’s  expenditure,  and  rent  and 
clothing  each  as  one-fifth,  the  apparent  increase  in  the  cost 
of  living  would  be  from  20  to  25  per  cent.  The  increase  in 
the  wage  rate  between  1903  and  1912  was  therefore  less  than 
one-third  of  the  increase  in  the  cost  of  living. 

There  is  one  other  fact  that  must  be  remembered.  The 
anthracite  miner  had  more  work  days  in  1912  than  he  had  in 


1 “Increase  in  Prices  of  Anthracite  Coal,”  op.  cit.,  p.  28. 


29 


1903.  The  total  days  worked  in  1912  was  231 ; and  in  1903, 
206.  Even  counting  this  additional  working  time  as  a part 
of  the  advantage  gained  by  the  miner  during  these  years, 
the  miner’s  earnings  increased  less  rapidly  than  prices. 

The  Bureau  of  Labor  estimates  that  the  operators  added 
$13,450,000  to  their  gross  receipts  as  a result  of  the  1912 
strike. 

There  seems  to  be  some  basis  for  the  operators’  assertion 
that  the  cost  of  producing  coal  had  increased.  The  agree- 
ment of  1912  added  9 cents  burden  to  the  labor  cost  of  coal. 

The  question  of  production  costs  is  thus  summarized  in 
* the  Federal  report:  “The  present  report  shows  that  the  re- 
cent increases  in  prices  have  been  more  than  sufficient  to 
compensate  fully  those  companies  whose  costs  of  production 
have  increased  more  rapidly  during  recent  years,  and  at  the 
same  time  has  very  greatly  increased  the  profits  of  those 
companies,  of  whom  there  are  at  least  several  whose  costs 
of  production  either  decreased  or  remained  stationary  dur- 
ing the  same  period. 

“This  conclusion  is  based  on  the  fact  that  when  normal 
years  are  compared,  none  of  the  companies  has  suffered  an 
increase  in  the  cost  of  production  equal  to  the  increase  in  the 
selling  price  over  and  above  the  recent  advance  in  wages.” 
As  a result  of  the  increased  activity  following  the  suspension 
of  1912,  “the  cost  of  production  of  one  important  company 
has  been  lower  during  the  last  six  months  of  1912  than  dur- 
ing any  year  since  1903,  in  spite  of  the  increase  in  wages  re- 
quired by  the  settlement  of  May  20,  1912.  These  com- 
paratively low  production  costs  during  the  latter  half  of  1912, 
combined  with  the  increased  prices,  have  created  for  this 
company  during  the  six  months  net  earnings  greater  than 
it  has  had  in  any  entire  year  from  1902  to  date.”  1 

The  total  result  for  the  operators  was  an  immense  in- 


1 “Increase  in  Prices  of  Anthracite  Coal,"  op.  cit.,  pp.  12-13. 


80 


crease  in  net  receipts.  “During  the  four  months — June  to 
September,  1912 — the  seven  companies  which  shipped  69.3 
per  cent  of  the  anthracite  coal  during  the  same  period  re- 
ceived at  the  advanced  prices  for  their  shipments  $3,572,588 
more  for  their  coal  than  they  would  have  received  at  the 
prices  prevailing  in  the  same  months  in  191 1.”  This  is  equiv- 
alent to  an  average  of  25.82  cents  per  ton  advance  over 
1911  prices. 

The  facts  of  the  1912  strike  verify  the  conclusions  already 
stated.  The  operators,  as  in  previous  cases,  used  the  strike 
as  a pretext  for  adding  to  prices  an  amount  equal  to  three 
times  the  increased  labor  cost  of  the  coal.  This  gave  to  the 
coal  companies  the  handsome  profit  of  thirteen  millions  in 
the  one  year  1912.  The  wage-workers,  after  a costly  strug- 
gle, found  themselves  still  unable  to  cope  with  the  increase  in 
the  cost  of  living.  The  consumers  fared  worst  of  all.  They 
paid  around  thirteen  millions  for  their  coal  over  and  above 
the  1911  prices.  In  return  for  this  immense  outlay,  they 
got  no  more  and  no  better  coal. 

The  struggle  of  1912  came  and  went.  The  mine  owners 
profited  handsomely;  the  workers  fared  indifferently,  and 
the  consumer  footed  the  bill ! ** 


9.  THE  COAL  CRISIS 

The  important  events  relating  to  the  monopolization  of 
the  anthracite  coal  fields  occurred  before  the  war  shook  the 
modern  world  to  its  foundations.  The  consumer  and  the 
worker  were  exploited.  The  owner  was  enriched. 

Before  a gun  had  been  fired ; before  an  embargo  had  been 
declared;  before  there  was  a sign  of  the  world  conflict,  at 
the  end  of  the  1912  strike,  the  private  ownership  of  the 
hard  coal  mines  had  proved  a failure, — serious  to  the  worker ; 
tragic  to  the  consumer. 


31 


The  war  broke  in  the  summer  of  1914,  and  with  it  came 
the  testing  time. 

The  war  reached  to  the  roots  of  society  and  tugged  at 
them  savagely.  Nothing  that  was  ill-rooted  could  survive 
that  test.  The  system  of  private  ownership  of  the  coal 
Business  was  a failure  before  the  war  was  heard  of.  The 
war-crisis  showed  it  up  plainly  to  everyone  for  what  it  was 
— a gigantic  blunder. 

During  the  winter  of  1917-1918,  scores  froze  to  death; 
thousands  died  of  pneumonia  and  other  diseases  due  to  the 
shortage  of  fuel;  millions  suffered  embittering  hardship; 
business  of  all  kinds  was  hampered ; and  the  conduct  of  the 
war  was  seriously  hindered  because  there  was  no  coal. 

It  is  not  possible  to  give  details  on  all  of  these  points,  nor 
is  it  necessary.  We  remember,  only  too  well,  how  people 
suffered, — how  the  long  lines  formed  outside  of  the  coal 
yards — women  and  children  standing  in  the  biting  wind  for 
hours,  often  to  be  told,  when  their  turn  came,  “No  more  coal 
today” ; how  the  gas  supply  and  the  oil  supply  ran  low  or 
failed  entirely;  how  the  sick  sent  up  their  cry  from  private 
homes  and  public  institutions ; how  the  babies  died  in  their 
cribs  from  “exposure”  in  homes  that  had  been  for  days  with- 
out fuel ; how  the  pneumonia  death-rate  shot  up  during  those 
terrible  days  of  late  December  and  early  January.  We  re- 
member, too,  how  the  schools  were  closed,  and  thousands 
of  children  turned  back  into  frigid  homes.  There  are  mil- 
lions who  will  not  forget  those  experiences  for  many  a long 
day. 

The  failure  of  the  fuel  supply  broadcasted  hardship.  Still 
there  is  nothing  so  very  unusual  about  the  prevalence  of 
Human  misery.  Since  the  establishment  of  capitalistic 
society  wretchedness  and  want  have  abounded.  Capitalism 
never  pretended  to  look  out  for  people  first.  Its  chief  inter- 
ests always  have  been  in  the  preservation  of  property  rights. 


32 


The  significant  thing  about  the  fuel  famine  is  that  it  struck 
a body  blow  at  property  rights. 

The  hand  of  the  fuel  famine  fell  heaviest  upon  the  ship- 
ping business.  The  American  business  interests  had  orders 
for  an  export  trade  of  half  a billion  dollars  a month.  The 
American  ship-building  program  was  in  its  infancy.  The 
submarines  were  deadly.  The  Allies  were  crying  to  the 
United  States  for  raw  materials,  food  and  munitions,  and 
the  United  States  was  straining  every  nerveuto  meet  these 
needs.  Ships  were  of  all  things  most  needful. 

Such  was  the  demand.  Note  these  words  from  the  New 
York  Times  of  January  sixth.  “Shipping  men  yesterday 
were  informed  by  the  authorities  of  the  port  of  New  York 
that  there  was  no  more  anchorage  roorrf  in  the  harbor,  and 
that  this  situation  would  prevail  until  some  of  the  vessels 
could  get  coal  to  enable  them  to  sail.”  “There  are  about 
150  steamships  detained  in  the  New  York  harbor  because 
of  a lack  of  coal.”  On  January  17,  in  his  supplementary 
statement,  Dr.  Garfield  made  an  even  more  sweeping  state- 
ment,— “War  munitions,  food,  manufactured  articles  of 
every  description,  lie  at  our  Atlantic  ports  in  tens  of  thou- 
sands of  tons,  while  literally  hundreds  of  ships,  waiting, 
loaded  with  war  goods  for  our  men  and  the  Allies,  cannot 
take  the  seas  because  their  bunkers  are  empty  of  coal.” 

What  a story ! 

The  business  world,  the  army  and  navy,  the  Allies,  all  cry- 
ing night  and  day  for  ships ; the  harbors  full  of  vessels  ready 
to  sail ; new  arrivals  unable  to  discharge  their  cargoes ; “on 
our  docks  and  in  our  warehouses  supplies  that  have  been 
backing  up  for  months”  (Dr.  Garfield  to  Senator  Reed,  Jan. 
17)  ; “vessels  lying  for  as  much  as  six  weeks  at  the  docks  of 
New  York  (New  York  Times,  Jan.  6)  ; idle  during  the  most 
critical  period  of  the  war — all  for  lack  of  a few  hundred 
thousand  tons  of  coal. 

Was  it  the  result  of  conspiracy  ? 

No! 


33 


It  was  the  result  of  impotency — the  impotency  of  a worn- 
out  system  of  social  and  economic  organization. 

It  was  the  final  word  in  the  message  that  told  the  world 
that  the  capitalist  method  of  doing  things  had  broken  down 
when  it  was  put  to  the  "test  of  a great  crisis. 

During  the  summer  and  fall  of  1917  the  newspapers  in- 
cessantly preached  efficiency  and  speed  to  “help  win  the 
war.”  Non-essential  industries  were  curtailed.  Conserva- 
tion was  enforced.  Labor  laws  were  laid  aside.  Women 
took  up  men's  work.  Commissions,  boards,  councils  and 
committees  were  entrusted  with  the  task  of  seeing  that  noth- 
ing impeded  the  work  of  turning  out  supplies  and  munitions 
for  the  equipment  of  the  American  troops  and  for  the  use 
of  the  Allies.  Everything  seemed  to  be  moving  along 
splendidly,  then,  on  a sudden^  capitalism  put  one  foot 
squarely  in  front  of  the  other,  tripped  over  the  awkward  toe 
and  fell  flat  on  its  face. 

There  was  no  coal! 

Efficiency  ? 

Efficiency  was  impossible  and  capitalism  had  made  it  so. 
For  once  there  was  no  talk  of  “German  gold";  “I.  W.  W. 
conspiracies" ; and  no  word  about  “traitors,"  but  American 
business  was  flat  on  the  ground. 

Men  and  women  came  from  cold  homes  to  cold  work- 
places, where  they  spent  half  of  their  time  trying  to  keep 
warm.  Many  were  sick.  Production  slowed  down  because 
the  producers  were  rendered  unfit  for  work. 

Manufacturing  establishments,  supply  plants  and  even 
munition  factories  were  compelled  to  close  for  lack  of  fuel. 
Railroads  curtailed  operations,  and  the  whole  shipping  indus- 
try was  crippled  at  the  moment  when  ships  were  the  most 
necessary  single  item  in  the  campaign  of  the  Allies. 

Then,  to  cap  the  climax,  came  the  order  from  the  fuel  ad- 


34 


ministration  to  cease  production  for  fourteen  days . Busi- 
ness was  thunderstruck.  The  work  of  “winning  the  war” 
to  which  the  business  world  had  committed  itself  was  set 
back  for  weeks  or  months,  and  this  was  done  by  an  ad- 
ministration established  in  the  interest  of  the  business  men. 

Was  Dr.  Garfield  to  blame  ? 

Not  for  a moment.  No  man  can  make  bricks  without 
straw.  .Had  his  middle  name  been  “Napoleon”  he  could  not 
have  saved  the  situation  and  preserved  the  system.  Capi- 
talism broke  down  because  it  was  a faulty  method  of  doing 
things.  Like  every  other  wrong  method,  it  was  bound  to  go, 
and  no  man  could  have  saved  it. 

Throughout  the  coal  famine  there  was  plenty  of  coal — 
plenty  in  the  ground ; plenty  dug  and  brought  to  the  surface. 

During  the  year  1917  the  anthracite  mines  produced  about 
six  million  tons  a month ; the  bituminous  mines  about  forty- 
five  million  tons  a month.  There  were  10,000,000  more  tons 
of  anthracite  and  42,000,000  more  tons  of  bituminous  mined 
in  1917  than  were  mined  in  1916,  and  1916  was  a banner 
year. 

Here  were  people  freezing,  industries  idle,  ships  tied  up 
for  lack  of  coal. 

There  was  an  unusually  large  production  of  coal. 

Many  well-meant  efforts  have  been  made  to  fix  the  blame. 

At  first  the  matter  was  laid  at  the  door  of  labor,  but  it 
soon  appeared  that  the  miners  had  worked  on  Thanksgiving 
Day,  on  holy  days  and  on  New  Year’s  Day. 

Again,  it  was  asserted  that  the  large  exports  of  coal  pro- 
duced the  shortage.  But  the  records  show  that  only  about 
18,000,000  tons,  or  three  per  cent  of  the  entire  output  was 
exported. 

The  operators  laid  the  blame  on  the  car-shortage.  The 
National  Coal  Association  was  able  to  show  on  December 


35 


fifteenth  that  there  was  a loss  of  ten  million  tons  in  the  pro- 
duction for  November  “solely  because  of  the  car  shortage 
and  slow  movement.,,  “In  the  Pittsburg  field,  on  Saturday 
December  eighth,  seventeen  mines  with  a production  of  17,- 
600  tons  stood  idle  all  day  for  lack  of  cars.”  On  the  follow- 
ing Friday,  “forty- two  mines  that  could  have  produced 
53,500  tons  were  unable  to  turn  a wheel  because  there  were 
no  cars”  (Phila.  Public  Ledger,  Dec.  17).  Similar  reports 
appeared  from  time  to  time. 

Even  at  that,  there  was  plenty  of  coal  lying  about.  Dr. 
Garfield  who  was  appointed  August  23,  1917,  told  a New 
York  audience  on  December  14:  “There  are  huge  piles  of 
coal  over  the  country.  It  is  not  uncommon  for  there  to  be 
100,000  tons,  200,000  tons  or  more  in  these  piles,  which  are 
held  in  reserve  by  great  industrial  concerns,”  (New  York 
Times,  Dec.  15.)  Dr.  Garfield  then  explained  that  the  rail- 
roads had  used  the  one  time  coal  cars  for  other  kinds  of 
freight.  He  did  not  blame  the  railroads,  but  he  warned  his 
audience  that  trouble  was  coming. 

The  facts  seem  to  be  that  the  railroads  had  allowed  their 
engines  to  go  unrepaired ; had  failed  to  buy  new  engines  and 
new  cars;  had  sold  rolling-stock  in  large  quantities  to  the 
Allies ; and  had  made  no  adequate  provision  to  meet  the  war 
situation. 

There  have  been  a number  of  suggestions  that  many  of  the 
operators  were  holding  back  the  coal  for  a better  price. 
Clifford  Thorne  told  the  Senate  Committee  on  January  7, 
that  the  coal  operators  were  making  profits  of  about  one  mil- 
lion dollars  a day.  Similar  testimony  was  brought  before 
the  Federal  Trade  Commission. 

When  all  is  said  and  done,  where  are  we  ? 

Just  where  we  began — with  the  coal  shortage. 


36 


10.  AN  OBJECT  LESSON  IN  MONOPOLY 

The  lesson  taught  by  the  anthracite  situation  is  unmis- 
takable. The  advantages  and  disadvantages  of  the  private 
monopoly  of  natural  resources  are  clearly  portrayed.  The 
conclusion  is  unavoidable. 

Since  the  private  ownership  of  the  anthracite  coal  fields 
came  to  its  logical  fruition,  in  the  formation  of  the  Anthra- 
cite Coal  Combination  of  1898  the  workers  have  gained 
somewhat,  the  consumers  have  lost  somewhat.  The  su- 
preme advantage  of  this  private  monopoly  of  a vital  natural 
resource  has  gone  to  the  private  owners.  When  the  crisis 
came  with  the  winter  of  1917-1918  the  whole  scheme  failed 
utterly. 

The  anthracite  coal  fields  are  only  one  of  the  natural  re- 
sources that  is  being  rapidly  brought  under  the  control  of 
small  groups  of  financial  and  industrial  leaders,  through  the 
system  of  private  land  ownership  under  corporate  control. 
The  lessons  from  the  anthracite  coal  fields  may  be  regarded 
as  typical  of  the  results  that  will  follow  from  the  monopoly 
of  other  equally  important  resources. 

The  consumer  must  always  carry  the  first  and  most  direct 
burden  of  monopoly.  Monopoly  prices  are  fixed  at  a figure 
that  will  yield  “all  that  the  traffic  will  bear.”  Increased 
costs  of  carrying  on  business,  no  matter  what  their  origin, 
are  passed  on  by  the  monopoly  to  the  consumer  in  the  form 
of  increased  prices.  The  power  of  substituting  some  other 
commodity  for  the  one  that  is  the  subject  of  monopoly  limits 
the  price  that  the  monopolist  may  charge.  Subject  only  to 
this  power  of  substitution,  the  monopolist  gets  all  that  he  can. 

The  worker  gains  nothing  front  the  presence  of  monopoly. 
As  an  employee  of  the  monopoly,  he  is  paid  wage  rates  that 
are  not  materially  different  from  the  wage  rates  paid  in  com- 
petitive industry.  The  present  method  of  fixing  wage  rates, 
by  competition  in  the  open  labor  market,  makes  it  inevitable 


37 


that  this  should  be  so.  Industry  pays  for  labor  not  what 
it  can,  but  what  it  must.  Even  though  a monopoly  could 
afford  to  pay  a much  higher  wage  than  a competitive  in- 
dustry, it  need  not,  and  therefore  does  not,  do  so. 

The  monopolist  is  the  real  gainer  from  monopoly.  The 
worker  who  serves  the  monopolist  is  paid  the  going  rate  of 
wages,  and  while  the  consumer  foots  the  bill,  the  monopolist 
records  his  advantage  in  the  form  of  increased  dividends. 

The  figures  show  conclusively  that  these  things  are  true 
of  anthracite.  There  is  good  reason  to  believe  that  they  will 
hold  no  less  true  for  other  equally  powerful  natural  resource 
monopolies. 

The  facts  cited  thus  far  have  referred  to  the  financial  cost 
of  monopoly.  They  are  definite.  They  are  significant. 
They  are  the  only  monopoly  facts  that  can  be  measured  in 
figures. 

There  are  other  aspects  of  the  monopoly  problem  that 
are  more  far-reaching  than  any  mentioned  thus  far.  Mo- 
nopoly affects  the  economic,  social  and  political  organization 
of  society  in  many  fundamental  ways. 

The  economic  effects  of  monopoly  are  of  far-reaching 
consequence.  The  monopolist  controls  the  jobs  or  oppor- 
tunities for  work;  second,  he  has  a price-fixing  power  over 
the  thing  he  produces ; third,  he  has  an  automatic  income- 
yielding  machine;  and  fourth,  his  monopoly  power  enables 
him  to  appropriate  values  socially  created.  These  four 
economic  effects  of  natural  resource  monopoly  give  the 
monopolist  a position  of  overwhelming  advantage. 

The  social  effects  of  monopoly  arise  largely  out  of  its 
economic  effects.  Monopoly  creates  inequality;  makes  for 
class  distinctions;  produces  exploitation  and  makes  impos- 
sible equality  of  opportunity.  In  all  of  these  ways  monopoly 
affects  the  organization  and  progress  of  society. 

Among  all  of  the  serious  results  of  natural  resource 


38 


monopoly,  perhaps  the  most  serious  is  the  fact  that  it  denies 
opportunity. 

Beside  the  economic  and  social  effects  of  monopoly,  there 
are  certain  political  effects,  equally  well  defined  and  equally 
undesirable  in  their  out-croppings.  Theoretically  the  citi- 
zens of  a democracy  are  the  government.  Practically,  the 
monopoly  of  natural  resources  vests  a section  of  govern- 
mental power  in  the  natural  resource  monopolists. 

The  most  vital  governmental  power  is  the  taxing  power. 
The  power  to  tax  includes  the  power  to  destroy.  The  tax- 
ing authority  holds  life  and  death  power  over  his  subjects. 

What  is  the  taxing  power  ? 

Originally  it  was  the  right  exercised  by  those  in  authority, 
to  levy  on  their  subjects.  These  levies  included  war  duty, 
labor  in  the  construction  of  some  public  work,  a percentage 
of  the  produce  of  the  land,  or,  in  later  times,  money. 

Earlier  ages  knew  no  such  thing  as  a regular  tax  rate. 
The  rule  of  the  tax  gatherer  was  “get  all  you  can.” 

Many  of  the  early  American  colonists  fled  from  just  such 
tyranny.  They  feared  taxes  because  taxes  meant  want  for 
the  tenant  and  luxury  for  the  proprietor. 

Politically,  no  phase  of  monopoly  is  so  important  as  its 
taxing  power.  The  powers  of  government  are  divided  be- 
tween the  people  (or  their  representatives)  and  the  owners 
of  the  natural  resources.  Although  the  facts  are  not  avail- 
able, there  is  every  indication  that  the  tax  paid  each  year 
by  the  American  people  to  the  owners  of  special  privilege  is 
greater  than  the  entire  amount  paid  by  them  for  the  main- 
tenance of  the  local,  state  and  national  governments. 

However  attractive  the  plan  for  the  private  ownership  of 
natural  resources  may  have  looked  to  the  early  settlers  of 
America;  whatever  escape  it  may  have  offered  from  the 
grim  tyranny  of  European  landlordism,  the  project  appar- 


39 


ently  has  failed.  It  was  designed  to  promote  ambition, 
initiative  and  thrift;  to  create  opportunity  and  to  increase 
the  possibilities  for  life,  liberty  and  the  pursuit  of  happiness. 
In  practice,  it  has  led  to  a new  form  of  monopoly — the  mo- 
nopoly of  industrial  opportunity. 

The  private  ownership  of  natural  resources  has  gone 
farther.  By  giving  to  individuals  the  exclusive  right  over 
the  choice  bits  of  the  earth’s  surface,  it  has  placed  in  the 
hands  of  these  individuals  an  immense  power— economic, 
social  and  political.  Thus  the  private  ownership  of  natural 
resources  has  centered  in  the  hands  of  the  resource  owners 
an  immense  authority  over  the  destinies  of  mankind. 

The  chief  resources  are  today  owned  by  corporations 
which  have  neither  energy,  thrift,  ambition,  nor  any  other 
human  virtue.  Instead,  they  are  legal  entities,  with  per- 
petual life,  limited  liability  and  an  immense  range  of  author- 
ity. The  ownership  of  most  of  the  important  resources  has 
passed  from  the  individual  to  the  corporation,  and  with  that 
transfer  there  has  gone  practically  every  one  of  the  original 
arguments  in  favor  of  the  private  ownership  of  resources. 
The  founders  of  American  democracy  were  aiming  at  in- 
dividual ownership.  The  revolution  in  the  form  of  indus- 
trial control  has  made  the  ownership  largely  corporate. 

Although  the  chief  reasons  in  favor  of  the  private  owner- 
ship of  natural  resources  have  been  swept  out  of  existence 
by  the  inauguration  of  corporate  ownership,  private  owner- 
ship remains — a special  privilege  under  the  control  of  the 
few,  and  carrying  with  it  a monopoly  power  of  the  most 
sweeping  character.  Exercising  its  authority  as  a means 
of  augmenting  profits,  strangely  blind  to  the  public  weal, 
the  monopoly  of  the  means  of  life  threatens  to  wreck  this 
civilization  as  it  has  wrecked  its  predecessors. 

Natural  resource  monopoly  entered  our  civilization  as  a 
friend  and  benefactor.  Time  and  experience  have  shown 
that  a wolf  was  hiding  under  the  sheep’s  clothing. 


40 


The  lesson  of  natural  resource  monopoly— as  it  appears  in 
history,  as  it  exists  in  the  anthracite  fields,  as  it  may  be  found 
in  other  American  resources — is  unmistakable.  The  bene- 
fits go  to  the  privileged  few,  while  the  great  majority  of 
men  pay  the  bill. 


11.  THE  WAY  OUT 

The  facts  that  have  ben  cited  show  conclusively  enough 
that  there  is,  in  the  anthracite  field,  a line-up  of  conflicting 
interests.  On  the  one  side  are  the  operators,  on  the  other 
side  are  the  workers  and  the  consumers.  The  operators  aim 
at  large  profits ; the  workers  demand  high  wages ; the  con- 
sumers seek  low  prices.  High  wages  and  low  prices 
threaten  profits,  hence  the  advocates  of  high  wages  and  low 
prices  are  necessarily  brought  into  conflict  with  those  who 
aim  at  large  profits. 

The  answer  which  American  philosophy  makes  to  such  a 
conflict  is  unmistakably  definite.  The  net  gain  must  be  the 
gain  made  by  the  majority.  The  principles  laid  down  as  the 
foundation  of  American  political  and  social  life  allow  of  no 
alternative. 

The  laws  of  life  dictate  that  in  every  conflict  some  must 
lose  and  some  gain.  Feudalism  boasted  a few  gainers  and  a 
great  many  losers.  The  early  colonists,  as  well  as  the 
founders  of  the  State  and  Federal  governments,  sought  a 
social  system  under  which  there  should  be  many  gainers 
and  only  a few  losers. 

The  problem  of  natural  resources  differs  not  a whit  from 
any  other  question  of  social  welfare  save  that  it  is  more  vital 
than  most  questions.  The  same  rule  of  social  procedure  that 
held  good  in  1789  holds  good  in  1916.  Those  things  that 
can  be  privately  managed,  with  a maximum  of  advantage 
to  the  community,  must  be  left  under  private  control.  Those 


41 


things,  on  the  other  hand,  that  under  private  control  might 
become  a menace  to  community  welfare  must  be  publicly 
managed  in  the  interests  of  all. 

One  group  of  interests  in  the  anthracite  fields  is  entirely 
willing  to  let  things  remain  as  they  are.  The  coal  owners 
are  satisfied.  They  can  well  afford  to  be  contented  with  the 
situation,  since  the  net  benefits  from  the  present  system  of 
land  control  accrue  almost  wholly  to  them.  ^ 

The  owners  are  satisfied,  but  they  are,  numerically,  only 
one  small  factor  in  the  problem.  There  are  160,000  anthra- 
cite workers.  What  is  their  position  ? 

The  workers  are  not  satisfied  with  things  as  they  are. 
On  the  contrary,  they  have,  during  recent  years,  expressed 
themselves  continually  and  forcefully  in  long-continued, 
bitter  labor  wars.  The  workers  want  a change  in  the  con- 
ditions prevailing  in  the  anthracite  fields,  and  they  want  it 
so  badly  that  they  have  shown  their  willingness,  during  one 
suspension  after  another,  to  suffer  privation  and  to  see  their 
families  suffer  privation  in  order  to  bring  about  the  changes 
in  which  they  believe. 

The  consumers  are  the  great  majority  of  people  at  inter- 
est in  the  anthracite  problem.  Under  the  present  system  of 
administration  of  the  coal  mines,  the  consumers  pay  the 
full  cost  of  every  increase  in  the  cost  of  production,  in  the 
wages  of  the  workers,  or  the  improvement  of  the  industry. 

The  consumer  is  thus  brought  face  to  face  with  the  monop- 
oly. The  operators  have  proved  themselves  sufficiently 
powerful  to  add  to  the  price  of  the  coal  the  increases  that 
have  come  from  changes  and  improvements,  and  in  addition 
a tidy  sum  in  return  for  their  monopoly  advantage.  The 
coal  owners  charge  “all  that  the  traffic  will  bear.”  What 
shall  the  consumers  do  to  secure  just  or  “cost”  prices? 

It  is  obvious  that  the  consumers  are  powerless  as  in- 
dividuals. Their  one  hope  lies  in  concerted  action.  The 


42 


monopolists  of  any  needed  resource,  under  the  present  sys- 
tem of  property  ownership,  are  able  to  force  their  will  as 
against  any  one  person,  or  as  against  any  group  of  persons, 
unless  they  are  powerfully  equipped  to  contend  in  the  eco- 
nomic arena. 

The  machinery  of  government  is  the  logical  channel 
through  which  the  consumers  may  express  themselves. 
They  are  the  body  of  the  people,  and  the  government  of  a 
democracy  is  a government  of  the  people.  The  consumers 
are  organized  in  the  most  powerful  organization  in  the  com- 
munity— the  government.  They  would  naturally  employ 
this  organization  in  their  efforts  to  secure  justice  in  their 
dealings  with  the  anthracite  interests. 

The  consumers  have  their  government  founded  on  the 
idea  of  political  democracy.  Side  by  side  with  this  political 
government,  dominating  its  activities  in  some  directions, 
threatening  its  very  existence  in  others,  is  the  power  of  the 
vested  interests.  This  power  is  so  great  that  it  is  able  to 
exercise  some  of  the  functions  of  government — most  im- 
portant among  them,  the  taxing  power — and  to  ignore  or  to 
negative  the  work  of  the  political  government. 

The  vested  interests  have  established  a form  of  govern- 
ment that  exists  at  the  same  time  and  place  as  the  political 
government  which  the  citizens  of  the  United  States  for  a 
long  time  believed  to  be  the  only  government  in  the  land. 

A house  divided  against  itself  cannot  stand.  Two  equally 
powerful  governments  cannot  exist  at  the  same  time  in  the 
same  jurisdiction.  One  or  the  other  is  bound  to  assume  a 
position  of  dominance. 

The  consumers  of  the  United  States  must  choose  between 
the  two  governments  in  the  anthracite  industry.  If  they 
favor  monopoly  profits,  they  should  decide  in  favor  of  the 
anthracite  interests.  If,  on  the  other  hand,  they  believe 
that  the  democratic  principles  that  underlie  the  American 
system  of  political  government  are  still  valid,  and  still  ap- 
plicable to  the  affairs  of  the  people,  then  the  people  them- 


43 


selves  must  undertake  the  management  of  this  and  of  every 
other  enterprise  whose  existence  threatens  the  continuance 
of  a government  by  the  people. 

The  workers  in  the  anthracite  regions  are  in  a position 
where  they  can  exist  under  the  present  economic  system  if 
they  are  able  to  maintain  a sufficiently  powerful  union.  To 
the  consumer,  the  continuance  of  the  present  economic  sys- 
tem in  the  anthracite  fields  means  not  only  the  financial 
burden  in  the  form  of  an  attack  on  the  very  foundations  of 
the  established  political  government,  which  the  consumers 
regard,  and  rightly  so,  as  their  one  source  of  protection  and 
power. 

The  interests  of  the  consumer  clearly  demand  that  the 
community,  acting  through  the  state  or  the  national  govern- 
ment, shall  take  possession  of  the  anthracite  coal  fields, 
operate  them  in  the  interests  of  the  community  and  sell  the 
people  coal  at  cost.  Many  recent  precedents  for  this  action 
exist.  The  government  has  developed  irrigation  projects 
and  sold  them  to  the  people  at  cost ; in  its  largest  single  ven- 
ture it  is  developing  transportation  in  the  Panama  Canal, 
and  selling  it  to  the  people  at  cost.  Since  the  outbreak  of 
the  war  all  necessary  industries  have  been  brought  more  or 
less  directly  under  the  control  of  the  government.  The 
time  seems  to  have  come  when  the  public  interest  demands 
that  the  government  shall  take  over  the  anthracite  coal  fields 
and  sell  anthracite  to  the  American  people  at  cost. 

A continuance  of  the  present  system  of  ownership  in  the 
anthracite  fields  will  benefit  the  operators  alone.  They  are 
the  ones  primarily  interested  in  the  maintenance  of  things 
as  they  are.  The  workers  and  the  consumers,  making  up 
the  vast  majority  of  those  who  are  interested  in  the  anthra- 
cite problem,  will  benefit  only  through  some  change  in  the 
present  system.  The  change  which  seems  most  likely  to  ben- 
efit both  workers  and  consumers  is  an  economic  reorganiza- 
tion that  will  make  the  community  the  owner  and  director  of 
the  anthracite  field  and  of  its  administration. 


44 


12.  THE  PROMISE  OF  SOCIALISM 

This  winter  the  coal-scuttle  was  empty  of  its  precious  con- 
tents, and  there  were  thousands  who,  strive  as  they  would, 
were  unable  to  fill  it.  To  them,  and  to  those  others  who  be- 
lieve that  the  coal-scuttles  all  over  the  land  should  be  filled 
while  there  is  coal  with  which  to  fill  them,  Socialism  comes 
with  its  message  and  its  promise. 

There  is  a way  to  keep  the  coal-scuttle  full. 

So  long  as  the  gifts  of  nature  hold  out,  and  so  long  as 
men  are  willing  to  work  together  for  the  common  good,  it 
will  be  possible  for  the  human  race  to  banish  economic  hard- 
ship and  economic  want.  None  need  hunger.  None  need 
be  cold.  None  need  suffer  for  lack  of  the  necessaries  of  life. 

To  obtain  these  results,  men  must  co-operate. 

Without  co-operation  social  progress  and  human  well- 
being  are  impossible. 

Thinkerg  and  students  have  for  years  predicted  the  failure 
of  private  capitalism  “Capital”  written  by  Karl  Marx  half 
a century  ago,  foretells  the  disintegration  of  the  present 
order.  Extreme  individualists  like  Herbert  Spencer  and 
Henry  George  believed  that  a society  founded  on  the  grab- 
it-all  principle  of  “every  man  for  himself”  was  headed  for 
disaster.  / 

Socialism  has  stood  consistently  for  the  social  ownership 
of  all  productive  machinery  because  Socialists  have  seen  in 
private  capitalism,  not  only  a menace  to  national  life  and 
welfare,  but  a threat  against  world  peace.  Bebel,  Tolstoi, 
Jaures  and  Hobson  anticipated  the  world  war  and  predicted 


45 


it.  They  argued  that  international  securtiy  could  not  pos- 
sibly be  founded  upon  the  national  selfishness  that  grew  out 
of  the  private  ownership  of  those  productive  industries  upon 
which  all  depend  for  a living. 

The  Socialist  leaders  who  foretold  disaster  to  the  capitalist 
system  were  “calamity  howlers,”  “pessimists,”  “agitators,” 
“purveyors  of  discontent,”  and  “anarchists.”  Today  their 
most  extreme  prophesies  fail  to  voice  more  than  a tiny 
fraction  of  the  miseries  that  capitalism  has  brought  upon 
the  human  race.  The  magnitude  of  the  disaster  that  capi- 
talism has  spread  over  the  world  during  the  past  few  years 
passes  all  bounds  of  the  imagination.  There  is  not  a village, 
and  scarcely  a home  in  all  Europe  that  has  not  been  bereft 
by  it. 

A system  like  capitalism,  based  upon  the  control  of  eco- 
nomic opportunity  by  the  few;  with  the  economic  surplus 
concentrated  in  the  same  few  hands;  with  the  many  ex- 
ploited for  the  advantage  of  those  who  control  the  economic 
power  of  the  community ; with  the  increasingly  rigid  distinc- 
tion between  workers  and  owners,  could  lead  in  only  one 
direction — toward  decay  and  dissolution. 

Capitalism  is  rapidly  destroying  itself ; meanwhile  the  peo- 
ple suffer. 

The  break-down  came  first  in  the  coal  business.  It  might 
have  come  almost  anywhere  else. 

The  unintelligent  rule  of  the  profit  system  never  had  a 
greater  showing  up  than  during  the  coal  crisis.  The  masters 
of  the  situation — the  mine  owners,  transportation  companies 
and  dealers — were  in  the  coal  business  to  make  the  largest 


46 


possible  profit.  They  were  not  concerned  to  keep  the  people 
warm.  * 

Either  the  coal  business  must  be  run  for  the  purpose  of 
making  human  beings  comfortable  and  happy,  or  else  it 
must  be  run  for  the  purpose  of  paying  someone  a profit. 

The  Socialist  Party  stands  for  the  proposition  that  the 
coal  business,  and  every  other  business  upon  which  the  pub- 
lic depends,  must  be  run  to  make  people  happy  and  useful. 
Until  the  people  learn  to  satisfy  their  need  for  fuel  in  the 
same  way  that  they  satisfy  their  need  for  the  carrying  of 
the  mail,  the  profiteers  will  continue  to  reap  their  harvest 
while  the  people  suffer. 

The  people  of'  the  United  States  will  be  compelled  to  take 
over  the  business  of  supplying  the  country  with  coal — not 
because  they  wish  to  do  so,  but  because  they  must  do  so. 
The  profiteers  have  tried  and  failed.  The  time  has  come 
for  the  plain  people  to  act. 


47 


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Dr.  I.  M.  Rubinow,  Dr.  Helen  L.  Sumner,  Fred 
Hewitt,  Int.  Machinists*  Union,  Prof.  W.  F. 
Ogburn,  Dr.  G.  M.  Price. 

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V*'  M/t'-' 


EUROPE 

IN 

REVOLUTION 


A LETTER 

from 

SCOTT  NEARING 


Copyright,  1920 
by 

RAND  SCHOOL  OF  SOCIAL  SCIENCE 
7 East  15th  Street 
New  York 


New  York  Call 
Printing  Company 


Europe  in  Revolution 


By  SCOTT  NEARING 


Paris,  September  28,,  1920. 

My  dear  Louis : — 

You  ask  me  to  tell  you  in  a word  what  is  happening  in 
Europe.  In  a word,  I answer — revolution. 


But  that  is  not  enough,  any  more  than  it  is  enough  to  say 
that  in  the  month  of  January  we  have  snow  in  the  United 
*5  States.  It  is  as  long  a step  from  the  strikes  and  lock-outs  of 
Barcelona  and  Athens  to  the  Socialist  Federated  Soviet  Re- 
public of  Moscow  as  it  is  from  the  snow  flurries  of  Atlanta 
- to  the  mountainous  drifts  of  Montana  and  the  Dakotas. 

Nor  is  it  enough  to  get  the  opinion  of  one  person  on  the 
v situation  here  in  Europe.  It  have  seen  only  a very  little  part 
of  the  whole  continent,  and  have  talked  with  less  than  one 
person  in  a hundred  thousand  of  the  population.  Then,  too, 
n in  an  atmosphere  reeking  with  propaganda,  it  is  nearly  im- 
^ possible  to  determine  what  are  facts  and  what  are  opinions. 
Consequently  I have  only  a personal  view  as  to  what  is  going 
on.  Take  it  for  what  it  is, — one  man’s  idea.  Do  not  bank 
y on  it.  Consider  it  in  the  light  of  what  other  information  you 
v can  get,  and  form  your  own  conclusions. 

With  that  little  word  of  warning,  let  me  give  you  some 
of  the  impressions  that  I have  received  as  to  the  things  that 
are  stirring  European  society  to  its  foundation. 

Europe,  at  the  moment,  is  a vast  experiment  in  social 
J revolution.  Experiment?  No,  it  is  more  than  that.  It  is  an 
object  lesson  of  the  first  importance  to  the  remainder  of  the 
world. 


Let  us  be  sure  that  we  are  talking  the  same  language. 

3 


When  I say  “social  revolution”  I mean  a rapid  and  thorough- 
going change  in  the  method  of  organizing  and  of  directing 
society.  The  substitution  of  a Republican  for  a Democratic 
administration  is  not  a social  revolution,  because  both  of  the 
parties  have  the  same  ideas  regarding  the  fundamentals  of 
social  organization.  But  the  establishment  of  an  industrial 
democracy  in  the  place  of  a feudal  aristocracy  is  a social 
revolution,  because  the  fundamental  methods  of  organizing 
and  directing  society  are  completely  changed. 

The  change  from  a monarchy  to  a republic,  which  was 
formally  begun  by  the  American  colonists  in  1776,  was  a 
revolution.  So  was  the  substitution  of  Sovietism  for  Czarism 
in  Russia.  This  process  of  revolution  includes  two  separate 
steps.  One  is  the  removal  of  the  old  social  form, — monarchy 
for  example.  The  second  step  is  the  setting  up  of  a new 
social  form, — for  example,  a republic.  These  two  steps  to- 
gether constitute  the  revolution. 

Now,  if  we  both  understand  what  we  mean  by  the  term 
social  revolution,  let  us  get  back  to  Europe.  

Europe  is  in  the  throes  of  social  revolution.  There  is  not 
a single  country  where  its  rumblings  are  not  heard.  Since 
March,  1917,  when  the  first  revolution  occurred  in  Russia, 
absolute  monarchy  and  divine,  kingly  rights  have  practically 
disappeared  from  the  continent.  Before  the  Russian  Revo- 
lution, four  fifths  of  the  people  of  Europe  were  under  the 
sway  of  monarchs  who  exercised  dictatorial  power  over  the 
domestic  and  foreign  affairs  of  their  respective  nations. 
Within  the  space  of  less  than  two  years,  the  Hohenzollerns, 
the  Hapsburgs  and  the  Romanoffs  were  driven  from  the 
thrones  of  Germany,  of  Austria  and  of  Russia.  Other  rulers 
of  lesser  importance  followed  in  their  wake,  until  to-day,  the 
old  feudal  power  that  held  the  political  control  over  most  of 
Europe  in  1914  has  practically  disappeared.  In  the  places 
of  the  former  absolute  monarchies,  there  have  been  estab- 
lished republics  of  varying  forms.  So  that  the  bulk  of  the 
peoples  of  Europe,  between  1917  and  1919,  did  exactly  what 
we  did  between  1776  and  1783 — they  declared  their  inde- 
pendence of  monarchy  and  in  its  stead  established  republics. 

This  is  the  obvious  thing — the  thing  that  has  been  in  all 
of  the  papers;  the  thing  that  no  one  thinks  of  denying.  It  is 

4 


a revolution  in  the  form  of  political  government — the  kind 
of  revolution  with  which  history  usually  deals  because  it  is 
the  kind  of  revolution  that  is  the  most  spectacular  and 
dramatic. 

But  there  is  another  revolution  proceeding  in  Europe,  far 
more  important  because  more  fundamental — I mean  the  eco- 
nomic and  social  revolution;  the  change  in  the  form  ot 
breadwinning ; the  change  in  the  relation  between  a man  and 
the  tools  that  he  uses  to  earn  his  livelihood.  This  economic 
and  social  revolution  is  not  so  obvious ; it  is  much  harder  to 
follow,  because  it  cuts  far  deeper  than  the  political  revolu- 
tion. It  is  therefore  not  nearly  so  well  understood. 

Everyone  knows,  now,  that  Czars  and  Kaisers  and  Em- 
perors did  not  really  control  Europe  before  1914,  except  in 
so  far  as  they  yielded  to  bankers  and  to  big  business  men. 
The  crown  and  the  sceptre  gave  the  appearance  of  power, 
but  behind  them  were  concessions,  monopolies,  economic  pre- 
ferments, and  special  privileges  enjoyed  by  bankers  and 
business  men.  These  men,  because  they  controlled  industry, 
which  is  the  source  of  so  much  of  the  modern  wealth,  con- 
trolled political  power,  which  depends  on  economic  support. 
The  European  revolution  that  began  in  1917  with  the  Czar, 
did  not  stop  with  kings.  It  began  with  them  because  they 
were  in  such  plain  sight,  but  when  it  had  finished  with  them 
it  went  right  on  to  the  bankers  and  the  business  men. 

When  I say,  therefore,  that  Europe  is  in  the  throes  of  a 
social  revolution,  I mean  that  the  method  of  controlling  the 
means  of  making  a living  is  being  rapidly  changed.  This 
process,  of  course,  involves  both  the  removal  of  the  old  eco- 
nomic system  and  the  establishment  of  the  new  one.  In 
most  of  the  countries  of  Europe,  the  old  economic  system 
is  busy  removing  itself. 

What  was  the  old  economic  system? 

First  of  all,  it  was  a system  that  divided  the  owner  from 
the  worker.  One  man  owned  a piece  of  land,  a mill  or  a 
railroad.  Other  men  worked  on  the  jobs  which  the  one  man 
owned.  As  the  system  developed,  the  ownership  was  turned 
over  to  artificial  people  called  corporations,  which  were 
created  by  the  law  and  endowed  with  perpetual  life  and 

5 


other  uncanny  attributes.  From  that  point  on,  the  workers 
were  under  the  control,  not  of  real,  but  of  pretended  people. 
Thus  the  relation  of  man  to  man  was  lost  in  industry,  and 
the  worker,  in  order  to  earn  a living  for  his  family,  was 
compelled  to  take  a job  where  he  could  get  it,  in  the  pay 
of  a great,  impersonal  “system”  that  paid  him  his  daily 
wages  but  gave  him  no  human  touch. 

The  worker,  thus  employed  by  the  owner  of  some  mine  or 
mill  or  factory,  received  a part  of  what  he  produced  in  the 
form  of  a wage  or  a salary.  The  other  part  of  the  wealth 
which  he  had  produced  went  to  pay  rent,  interest,  profits  or 
dividends.  In  the  early  stages  of  the  present  system,  while 
the  owner  of  the  job  was  still  a person,  he  very  often  worked 
for  him.  Later,  however,  when  the  owner  could  go  on  the 
Stock  Exchange  in  New  York  or  London  and  buy  the  job 
by  buying  some  stocks  or  bonds  in  the  corporation,  he  ceased 
to  have  any  connection  with  the  job.  He  might  own  New 
York  Central  stock  and  live  in  Sacramento  or  in  Nice  or  in 
Geneva.  He  had  become  an  absentee  job  owner,  but  the 
interest  or  the  dividend  went  to  him,  just  the  same;  and 
since  he  had  bought  the  stock  as  an  investment,  that  was  all 
he  really  cared  about.  Thus  the  worker  had  become  a 
servant  to  an  invisible  master,  for  whom  he  made  a living 
that  the  invisible  master  spent  at  his  pleasure. 

The  job  owners  who  remained  on  the  job  and  worked  with 
the  men  stayed  fit  and  kept  their  heads,  but  those  who  never 
saw  a tool  and  who  never  did  a day’s  work  grew  flabby  and 
soft  in  their  bodies  and  in  their  thinking  machinery.  They 
ceased  to  feel  with  the  rest  of  the  great,  busy  world.  They 
became  a leisure  class — separated  from  their  fellow  men  by 
the  very  fundamental  fact  that  the  remainder  of  their  fellow 
men  were  compelled  to  make  a living  while  they  were  able  to 
live,  without  doing  any  work,  on  the  product  of  the  labor 
of  others. 

Other  owners,  more  ambitious  and  energetic,  busied  them- 
selves in  the  collection  of  millions  of  dollars  or  pounds  or 
yen.  These  millions,  representing  the  surplus,  taken  by 
them  from  the  labor  of  the  workers,  they  then  proceeded  to 
invest,  both  at  home  and  abroad,  and  thus  they  gained  other 

6 


millions  and  tens  and  hundreds  of  millions  which  they  called 
their  own.  After  a time  the  land  and  the  tools  and  the  mines 
and  the  machines  were  all  in  the  hands  of  these  few  people. 
The  remainder  were  given  the  chance  to  work  for  the  owner, 
on  the  terms  of  the  owners,  or  to  starve.  These  things 
happened  in  the  United  States  between  1870  and  1915. 

The  same  things  had  happened  or  were  happening  in 
Europe.  Here  were  the  workers  who  produced.  There 
were  the  owners  who  controlled.  The  system  was  called 
“industrialism”  or  “capitalism.” 

Some  of  the  big  business  men,  in  the  different  countries, 
got  to  quarreling.  They  wanted  markets  for  their  products. 
They  wanted  resources  to  exploit.  They  wanted  oppor- 
tunities to  invest  the  wealth  which  their  ownership  of  the 
jobs  had  given  them.  And  several  of  them  wanted  the  same 
things — as  oil  wells  in  Mexico  or  railroad  concessions  in 
China  or  trade  routes  from  the  East.  These  quarrels  grew 
fiercer  as  the  demand  for  markets  and  resources  and  invest- 
ment opportunities  grew  greater.  Finally,  in  1914,  the 
quarrel  took  the  form  of  a war. 

The  capitalist  system,  which  had  come  into  being  with  the 
Industrial  Revolution  of  the  eighteenth  century,  now  faced 
a crisis.  War  is  destruction,  organized  and  directed  by  the 
best  brains  available.  It  is  merry  sport  for  the  organizers 
and  for  some  of  the  directors,  but  like  any  other  destructive 
agent,  it  may  get  out  of  hand.  The  War  of  1914  was  to 
last  for  six  weeks.  It  dragged  on  for  five  years,  and  the 
wars  that  have  grown  out  of  it  are  still  continuing.  In  the 
course  of  those  five  years,  the  war  destroyed  the  capitalist 
system  of  continental  Europe.  There  are  patches  and  shreds 
of  it  left,  but  they  are  like  the  topless,  shattered  trees  on  the 
scarred  battle-fields.  They  are  remnants — nothing  more. 

When  I say  that  the  war  destroyed  the  capitalist  system 
of  continental  Europe,  I mean  exactly  what  I say,  and  I 
mean  it  in  three  wholly  different,  but  complementary  senses. 
In  the  first  place,  the  war  destroyed  the  confidence  of  the 
people  in  the  capitalist  system ; in  the  second  place,  it 

7 


smashed  up  the  political  machinery  of  capitalism;  in  the 
third  place,  it  weakened  or  destroyed  the  economic  machinery 
of  capitalism. 

I put  the  destruction  of  confidence  first  because  it  is,  in 
many  respects,  the  most  important.  No  social  organization 
can  exist  that  does  not  command  the  confidence  of  those 
who  support  it.  That  is  as  true  of  the  Czar’s  government 
in  Russia  as  it  is  of  the  constitutional  government  of  Canada. 
Before  the  war,  most  of  the  people  of  Europe  believed  in 
their  governments.  If  things  were  not  all  that  they  should 
be,  they  shrugged  their  shoulders,  said  that  nothing  in  this 
world  is  perfect  and  that  after  the  first  of  the  year  matters 
would  pick  up.  There  was  a powerful  Socialist  movement 
all  over  Europe,  prior  to  the  war,  but  the  Socialists,  in  the 
eyes  of  the  masses,  were  “theorists,”  and  people  hate  to 
leave  a sure  thing  for  an  indefinite  promise  of  future  ad- 
vantage. 

Each  government,  to  win  the  war,  lied  to  its  people.  They 
were  told  that  their  country  was  invaded.  They  were  as- 
sured that  the  war  would  be  a short  affair.  Beside  that, 
there  were  various  reasons  given  for  the  struggle — it  was  a 
war  to  end  war;  it  was  a war  to  break  the  iron  ring  that 
was  crushing  a people;  it  was  a war  for  liberty;  it  was  a 
struggle  to  make  the  world  safe  for  democracy. 

On  all  of  these  issues,  the  governments  over-advertised. 
The  war  dragged  out  through  months  and  years.  People 
lost  faith  and  heart.  There  were  famine  and  disease.  Men 
died  by  the  millions.  Whole  country-sides  were  desolated. 
The  populations  of  the  war-ridden  countries  began  to  feel 
no  matter  what  they  might  get  out  of  the  war,  the  cost 
would  be  too  high. 

Armistice  day  came.  People  went  mad.  They  danced, 
sang,  wept,  drank,  caroused,  rejoiced.  The  world  was  de- 
lirious, because  at  last  the  night-mare  was  ended  and  the 
promises  of  the  governors  would  come  true. 

• 

But  the  promises  did  not  come  true.  The  British  and 
French  populations  were  kept  in  heart  by  the  assurance  that 

8 


Germany  would  pay  and  that  the  Kaiser  would  be  hanged. 
Meanwhile  prices  mounted ; famine  stalked ; taxes  rose ; dis- 
ease ravished.  Still  there  were  the  fourteen  points,  and 
when  Mr.  Wilson’s  train  passed  along  on  its  trip  into  Italy, 
men  and  women  fell  on  their  knees  to  offer  prayers  for  the 
coming  of  this  new  savior,  and  in  their  homes  they  lighted 
candles  before  little  plaster  busts  of  him,  set  in  niches  on 
the  wall. 

There  followed  the  weary  months  of  delay,  with  their 
disappointments,  their  rising  prices,  their  increasing  taxes, 
their  new  loans,  unemployment,  misery  and  want.  Then 
came  the  Treaty— with  destruction  for  the  Central  Empires 
and  for  the  others  an  empty  bag.  Germany  could  not  pay; 
the  Kaiser  was  not  hanged;  the  armies  remained  mobilized, 
and  the  war  went  grimly  on — against  Russia. 

Perhaps  that  was  the  supreme  disappointment.  If,  per- 
chance as  a result  of  the  war,  these  hundred  and  sixty  mil- 
lions might  have  freed  themselves  and  have  been  given  a 
little  assistance  along  the  road  that  they  felt  led  toward 
liberty,  many  of  the  most  ardent  souls  in  Europe  would  have 
regretted  the  cost,  and  rejoiced  at  the  outcome.  But  the 
armies  of  the  Allies,  instead  of  being  the  angels  of  liberty, 
turned  out  to  be  nothing  better  than  the  legions  of  reaction, 
until  the  soldiers  themselves  mutinied  and  refused  to  go 
farther  with  the  hideous  business.  With  Yudenich,  Denikine, 
Kolchak,  and  the  White  terror  in  Hungary  and  in  Finland  on 
their  hands,  with  the  blockade  and  with  twenty  wars,  what 
could  the  Allied  Governments  say  to  their  people  ? 

Not  a single  important  promise  of  the  war  was  fulfilled, 
save  only  the  promise  of  victory.  Hundreds  of  millions, 
aroused  to  the  heights  of  an  exalted  idealism,  came  back  to 
earth  only  to  find  themselves  betrayed.  With  less  promise 
and  more  fulfilment;  with  at  least  an  appearance  of  states- 
manship; with  some  respect  for  the  simple  moralities  of 
truth-telling,  fair-dealing,  and  common  honor,  there  might 
have  been  some  chance  for  the  capitalist  system  to  retain 
the  confidence  of  the  peoples  of  war-torn  Europe,  even  in 
the  face  of  the  Russian  Revolution  and  all  that  it  implied; 
but  each  of  these  things  was  lacking,  and  as  one  worker  put 

9 


it:  “I  don’t  know  what  Bolshevism  is,  but  it  couldn’t  be 

any  worse  than  what  we  have  now,  so  I’m  for  it!” 

Such  a loss  of  public  confidence  would  have  proved  a 
serious  blow  to  any  social  system,  even  were  it  capable  of 
immediately  re-establishing  normal  conditions  of  living  among 
the  people  In  this  case,  the  same  events  that  destroyed  pub- 
lic confidence  in  the  capitalist  system,  destroyed  the  system 
itself. 

I have  already  spoken  of  the  overthrow  of  the  old  poli- 
tical forms  of  Europe — the  czars,  emperors  and  kaisers,  who 
stood  as  the  visible  symbols  of  established  order  and  civiliza- 
tion. The  economic  forces — the  banks  and  business  men — 
had  used  these  forms  for  the  promotion  of  their  business 
enterprises.  Capitalism  depended  on  czars  and  kaisers  as 
a blacksmith  depends  on  his  hammer.  They  were  among 
the  tools  with  which  business  forged  the  chains  of  its  power. 
They  were  the  political  side  of  the  capitalist  system.  While 
the  people  acceped  them  and  believed  in  them,  the  business 
interests  were  able  to  use  these  political  tools  at  will.  The 
tools  were  destroyed  in  the  fierce  pressure  of  war  and  revo- 
lution, and  with  them  went  one  of  the  chief  assets  of  the 
European  capitalists. 

There  was  a third  breakdown — far  more  important  than 
the  break  in  the  political  machinery  of  the  capitalist  system 
— and  that  was  the  annihilation  of  the  old  economic  life. 

Economic  life  is,  in  its  elements,  very  simple.  Raw  mate- 
rials— iron  ore,  copper,  cotton,  petroleum,  coal  and  wheat — 
are  converted,  by  some  process  of  labor,  into  things  that  feed, 
clothe  and  house  people.  There  are  four  stages  in  this 
process — raw  materials ; manufacturing ; transportation ; 
marketing.  They  are  like  the  four  stages  in  the  preparation 
of  a dinner — buying  the  food,  bringing  it  home,  cooking  it, 
putting  it  on  the  table.  If  there  is  a failure  in  one  of  the 
four,  all  of  the  rest  go  wrong,  as  is  very  clearly  illustrated 
whenever  there  is  a great  miners’  or  railroad  workers’  strike, 
or  when  there  is  a failure  of  a particular  crop.  Well,  during 
the  war,  all  four  of  these  economic  stages  went  wrong. 

10 


Economic  stages,  such  as  I have  described,  are  creative. 
Each  one  leads  into  the  next,  and  the  object  of  the  whole  is 
the  feeding  and  clothing  and  housing  of  people.  War  is 
destructive.  Its  purpose  is  to  tear  down,  while  that  of  in- 
dustry is  to  build  up.  The  two  forces  are  therefore  contra- 
dictory. One  negates  the  other. 

Between  the  years  1914  and  1918  the  people  of  Europe 
busied  themselves  with  a war  that  put  their  economic  machine 
out  of  the  running.  So  complete  was  the  destruction  that 
after  two  years  of  semi-peace  the  broken  fragments  are  still 
lying  about  in  plain  sight  of  every  observer.  I do  not  speak 
of  the  great  areas  where  the  battles  were  fought.  There, 
the  earth  is  wiped  clean.  Even  the  houses  and  the  trees  and 
the  people  have  gone.  I refer  to  the  curtailment  of  normal 
production,  the  disorganization  of  transportation  and  the 
demoralization  of  marketing  and  finance. 

Pre-war  economic  relations  were  delicately  balanced  in 
Europe.  Each  of  the  great  nations  purchased  its  supply  of 
raw  materials  by  exchanging  for  them  some  of  its  manufac- 
tured products.  Through  this  means  wheat,  cotton,  rubber, 
copper,  iron,  coal  and  many  other  essential  commodities  were 
bought.  The  normal  economic  life  of  nations  like  Germany, 
France  and  Great  Britain  consisted  in  turning  raw  materials 
into  manufactured  products,  and  exchanging  them  for  more 
raw  materials  and  for  food. 

The  war  destroyed  this  economic  balance.  During  the 
struggle  the  supplies,  the  energy  and  the  life  of  the  people 
was  turned  to  the  production  of  munitions  and  war  equip- 
ment. Factories  were  converted  for  this  kind  of  work;  sup- 
plies of  raw  material  were  exhausted;  credit  was  strained; 
and  when  the  conflict  ended,  each  nation  was  left  with  mu- 
nition factories;  empty  bins  and  warehouses;  enormous 
debts,  and  vast  supplies  of  war  material  that  were  wanted 
by  no  one.  For  a hundred  years  the  nations  of  Europe  had 
been  busy  building  a finely  adjusted  economic  mechanism; 
population,  finance,  commerce — all  were  knit  into  the  same 
system.  This  system  the  war  demolished,  and  the  two  years 
that  have  followed  the  Armistice  have  not  seen  it  rebuilt  in 


11 


any  essential  particular,  save  in  Great  Britain  and  in  some 
of  the  neutral  countries. 

Not  only  are  the  European  nations  unable  to  give  com- 
modities in  exchange  for  the  things  they  need,  but  the  ma- 
chinery of  finance,  by  means  of  which  these  transactions 
were  formerly  facilitated,  has  been  crippled  almost  beyond 
repair.  Under  the  old  system  buying  and  selling  were  carried 
on  by  the  use  of  money,  and  money  has  ceased  to  be  a stable 
medium  of  exchange  in  Europe.  It  would  be  more  correct 
to  say  that  money  is  no  longer  taken  seriously  in  many  parts 
of  Europe.  During  the  war  the  European  governments 
printed  7 5 billions  of  dollars  worth  of  paper  money.  This 
paper  has  depreciated  to  a ridiculous  extent.  Before  the 
war,  the  franc,  the  lira,  the  mark  and  the  crown  had  about 
the  same  value — 20  to  23  cents,  or  about  five  to  a dollar. 
To-day  the  dollar  buys  15  francs;  23  liras;  40  marks,  and 
250  Austrian  crowns.  In  some  of  the  ready-made  countries, 
constituted  under  the  Treaty  or  set  up  by  the  Allies  as  a 
cordon  about  Russia,  hundreds  and  thousands  of  crowns 
may  be  had  for  a dollar.  Even  the  pound  sterling,  which 
has  kept  its  value  better  than  the  money  of  any  of  the  other 
European  combatants,  is  twenty  per  cent,  below  par,  when 
measured  in  terms  of  dollars.  This  situation  makes  it  im- 
possible for  the  nations  whose  money  is  at  such  a heavy  dis- 
count to  purchase  supplies  from  the  more  fortunate  coun- 
tries. But  to  make  matters  even  worse,  the  rate  of  exchange 
fluctuates  from  day  to  day  and  from  hour  to  hour  so  that 
business  transactions  can  only  be  negotiated  on  an  immense 
margin  of  safety.. 

Add  to  this  financial  dissolution  the  mountains  of  debt, 
the  huge  interest  charges  and  the  oppressive  taxes,  and  the 
picture  of  economic  ruin  is  complete. 

There  is  no  need  for  me  to  go  into  further  detail.  What 
Davidson  and  Vanderlip  have  said  to  the  people  of  the 
United  States,  Eugene  Schneider  has  said  to  the  people  of 
Europe.  They  have  told  the  story  in  full,  and  as  bankers 
and  business  men  they  know  the  field  far  more  intimately 
than  I could  hope  to  know  it.  They  have  described  a situa- 
tion that  Mr.  Vanderlip  characterized  by  the  phrase  “par- 

12 


alyzed  industry.”  He  might  have  written  “paralyzed  capi- 
talism” with  equal  truth. 

The  old  capitalist  world,  organized  on  the  theory  of  com- 
petition between  business  men  within  each  nation,  and  be- 
tween the  business  men  of  one  nation  and  those  of  another 
nation,  has  reached  a point  where  it  will  no  longer  work. 
Outside  of  Great  Britain  and  some  of  the  smaller  countries 
that  did  not  suffer  from  the  war,  it  has  been  wrecked  poli- 
tically and  economically.  Above  all,  the  people  of  the  war- 
ridden  countries  have  ceased  to  believe  that  there  is  any  hope 
for  the  future  in  the  capitalist  system  of  society. 

What  I have  said  does  not  apply  to  the  profiteers,  to  the 
bourgeoisie,  or  to  the  peasants  and  small  farmers.  The 
profiteers  have  done  very  well  in  all  of  the  warring  coun- 
tries. The  middle  class  holds  to  the  old  system  with  the 
tenacity  of  habit  and  long  training.  The  peasants,  living 
directly  from  the  land,  are  able  to  supply  themselves  with 
most  of  the  necessaries  of  life.  They  are  therefore  not  de- 
pendent, to  any  vital  degree,  on  the  outside  world.  Economic 
disorganization  effects  them,  but  it  does  not  starve  and  freeze 
them  as  it  does  the  city  workers. 

The  burden  of  the  crisis  rests  on  the  city  workers.  They 
were  the  pawns  of  capitalism  before  the  war,  and  now  they 
are  its  victims.  They  have  no  means  of  individual  support; 
unemployment,  for  them,  means  death;  high  prices  destroy 
their  children;  the  dislocation  of  industry,  following  on  the 
war,  leaves  them  two  choices — to  starve  with  their  families 
or  to  establish  some  new  order  of  society. 

I wish  that  there  were  words  strong  enough  to  picture  the 
situation  of  the  city  worker  in  central,  eastern  and  parts  of 
southern  Europe.  He  faces  an  alternative — revolution  or 
death.  He  is  not  dealing  with  theories.  He  is  no  economist. 
Only,  the  means  of  livelihood,  on  which  he  has  always  de- 
pended, have  crumbled  under  his  feet.  He  must  act,  or  see 
his  family  die. 

If  some  of  the  pious  and  well  fed  opponents  of  “Bolshe- 
vism” and  revolution,  who  are  talking  so  loudly  in  the 

13 


United  States,  could  come  to  Europe  and  see  the  wreckage 
of  the  old  capitalist  system — the  first  half  of  the  revolution — 
and  then  could  stand  in  the  shoes  of  the  workers  who  are 
unemployed  and  staggering  under  the  burden  of  high  prices, 
taxes,  and  scarcity,  they  would  take  on  several  shades  of 
red  over  night.  Revolution  here  is  not  a theory : it  is  a fact. 
In  Russia  the  old  system  has  disappeared,  and  a new  system 
has  been  set  up  in  its  place.  In  Germany,  and  throughout 
central  Europe,  the  old  system  is  shattered,  and  the  new  has 
not  yet  emerged.  In  France,  Italy  and  Great  Britain  the 
old  system  is  in  process  of  disintegration — rapid  in  France 
and  Italy;  slower  in  Great  Britain.  But  in  all  of  these  coun- 
tries intelligent  men  and  women  are  asking  the  only  question 
that  statesmanship  can  ask — the  question,  “What  next?” 

Russia  has  gone  farther  toward  answering  that  question 
than  any  other  nation  of  Europe.  The  old  system  crashed 
first  in  Russia  because  it  was  less  securely  founded,  and  the 
experiments  in  a new  order  have  gone  farther  there  because 
the  necessity  for  some  line  of  action  was  more  imperative. 

There  are  in  Europe,  at  the  present  time,  only  two  policies 
— the  policy  of  France,  which  aims  at  the  maintenance  and 
extension  of  capitalism  and  imperialism;  and  the  policy  of 
Russia,  which  aims  at  the  establishment  of  a new  society, 
founded  on  the  dignity  and  the  supremacy  of  labor.  All  of 
the  other  countries  are  lined  up  on  one  side  or  the  other  in 
the  struggle  between  these  two  theories  of  social  life. 

For  a time,  it  seemed  as  though  it  would  be  possible  to 
crush  the  Russian  experiment  by  force  of  arms;  by  foster- 
ing civil  war ; by  maintaining  the  blockade.  That  plan  failed 
for  four  reasons:  first,  because  Russia  was  too  big  and  too 
strong  as  a nation;  second,  because  the  old  order  in  Russia 
had  disappeared  so  completely;  third,  because  the  old  order 
was  so  weak  in  France,  Italy  and  Great  Britain  that  the 
governments  could  not  line  up  their  peoples  for  the  task; 
and  fourth,  because  the  workers  in  all  of  the  countries  in- 
volved took  so  decided  a stand  against  the  proposed  action. 
Russia  did  not  survive  because  of  any  good  will  felt  by 
Lloyd-George,  Clemenceau,  Orlando,  Millerand  and  Wilson. 

14 


It  survived  because  it  was  relatively  strong  and  they  were 
relatively  weak. 

Europe  in  revolution  means,  first  of  all,  Russia.  There, 
the  old  order  has  already  gone,  and  the  new  one  is  already 
set  up.  What  new  order  ? It  is  difficult  to  say. 

What  is  present-day  Russia  ? There  have  been  many  con- 
flicting statements,  and  yet  there  is  a consensus  of  opinion 
that  is  slowly  emerging.  Capitalist  journalists,  liberals,  con- 
servative trade  unionists,  moderate  socialists,  and  radicals  of 
all  shades  of  opinion  have  spent  weeks  or  months  in  making 
careful  studies  of  the  Russian  situation.  Their  accounts 
differ,  but  there  are  many  points  of  agreement. 

First  of  all,  they  agree  that  there  have  been  four  stages  in 
the  Russian  Revolution.  There  was  the  break-down  of  the 
old  Czarist  regime;  then  came  the  struggle  to  determine  the 
type  of  control ; in  the  third  place,  with  the  Bolshevists  estab- 
lished, there  was  the  period  when  Bolshevism  was  forced  to 
meet  the  combined  attack  of  counter-revolution  within  and  of 
allied  aggression  without;  finally  there  was  the  period  of 
construction,  during  which  the  leaders  of  the  new  regime 
have  been  seeking  the  best  means  of  organizing  and  directing 
the  new  society. 

All  observers  agree  that  the  spirit  of  the  workers  in  Russia 
is  remarkable.  After  six  years  of  continual  warfare,  they 
are  holding  to  a new  idea.  They  have  seen  a light,  and  they 
believe  m its  reality.  The  Russian  city  workers,  to-day,  feel 
the  same  enthusiasm  as  that  which  was  felt  by  the  French 
workers  after  1793. 

There  is  also  a unanimity  of  opinion  on  the  desperate 
economic  straits  in  which  the  Russians  find  themselves  at  the 
present  time.  They  lack  leather,  machinery,  cotton,  railroad 
equipment,  and  many  of  the  other  necessary  elements  for 
production.  They  lack  food,  fuel,  clothing  and  the  simple 
necessities  of  every-day  life.  They  lack  medicines,  disinfec- 
tants and  soap.  In  short,  those  things  which  are  regarded 
as  the  prime  essentials  of  modern  civilization  are  wanting  in 
Russia.  The  consequent  suffering  is  terrible.  People  are 
habitually  hungry;  disease  rages,  for  lack  of  the  means  to 
check  it;  the  whole  population  is  badly  shod  and  clothed. 

15 


In  the  industrial  centres,  people  are  sick  and  cold  and 
starving. 

Observers  are  equally  unanimous  in  declaring  that  the 
Government  is  taking  exceptional  care  of  the  children.  They 
are  better  fed  than  the  adults.  They  are  provided  with 
schools ; with  recreation  centres ; with  opportunities  for 
esthetic  development;  with  an  intimate  understanding  of  so- 
cial life.  Women,  before  child-birth,  receive  special  con- 
sideration. Babies  and  mothers,  after  birth,  are  given  ex- 
cellent care.  The  British  Trade  Union  delegation  to  Russia 
remarked  that  here,  at  last,  there  was  a state  that  really  made 
the  coming  generation  a first  charge  on  its  resources. 

There  is  some  difference  of  opinion  as  to  the  strength  of 
the  Red  Army.  It  is  large.  It  is  becoming  well  organized. 
It  is  not  well  equipped.  It  has  behind  it  a system  of  military 
conscription  which  includes  industrial  conscription  in  times 
of  special  stress. 

The  economic  life  of  Russia  has  undergone  a complete 
transformation.  Most  of  the  land — over  nine  tenths  of  it — 
is  in  the  hands  of  the  peasants.  Mineral  resources,  railroads, 
the  large  industries,  the  banking  system,  foreign  trade  and 
some  large  scale  agricultural  stations  are  the  property  of  the 
nation.  The  economic  power  of  Russia  is  thus  divided  be- 
tween the  peasants,  who  hold  the  agricultural  land,  and  the 
state,  which  is  in  control  of  all  of  the  chief  forms  of  capital. 

This  highly  centralized  industrial  organization  is  under 
the  direction  of  the  Council  of  National  Economy,  which  is 
assisted  by  regional  and  local  councils.  There  is  a three-fold 
representation  on  these  councils — from  the  state,  from  the 
workers,  and  from  the  experts  in  industry. 

The  immediate  problem  of  managing  industry  has  been 
placed  in  the  hands  of  the  trade  unions,  to  which  all  workers 
must  belong.  The  immediate  problem  of  distribution  has 
been  given  into  the  hands  of  the  co-operatives,  which  have 
become  a part  of  the  official  machinery  of  Russia.  Thus, 
these  two  questions — of  maintaining  production  and  of  in- 
suring distribution — are  turned  over  to  those  immediately 
concerned  with  them:  the  workers  and  the  consumers. 


16 


Production  has  lagged,  terribly.  Distribution  has  been 
rendered  difficult  by  the  lack  of  transportation,  the  pressure 
of  war  demands,  and  the  lack  of  a medium  of  exchange  that 
will  prove  generally  acceptable. 

Profiteering  and  speculation  have  been  reduced.  Para- 
sitism has  been  practically  eliminated,  since  it  is  very  difficult 
for  anyone  to  obtain  a livelihood  unless  he  works  for  it. 

These  are  the  outstanding  facts  of  the  Russian  situation 
as  I have  gained  them  by  reading  official  reports,  talking 
with  labor  delegates  and  discussing  the  situation  with  those 
who  have  been  in  Russia  on  various  unofficial  missions.  As 
for  the  foreign  policy  of  Russia,  there  is  no  need  to  go  into 
that  question  as  you  know  as  much  about  it  as  I do.  They 
have  been,  and  still  are,  in  favor  of  self-determination,  and 
they  want  the  East  to  stand  on  its  feet  and  assert  its  right 
to  treat,  on  equal  terms,  with  the  West.  Whatever  the  new 
government  in  Russia  may  be,  certainly  it  is  not  imperial  in 
the  old  capitalist  sense. 

I have  cited  these  facts  because  I wanted  to  convey  to 
your  mind  this  idea — that  those  who  agree  with  the  Soviets 
and  those  who  disagree  with  them  are  at  one  on  these  two 
propositions:  (1)  The  old  order  has  gone  in  Russia;  (2) 
there  is  a new  order  there,  already  in  part  established,  which 
differs  in  all  of  its  essential  conceptions  from  the  old.  As 
one  visitor  to  Russia  put  it,  “You  must  either  accept  the 
Lenine  Regime,  or  else  you  must  find  something  to  put  in 
its  place  that  will  commend  itself  at  least  as  warmly  as  does 
the  present  Government  to  the  Russian  masses.” 

In  other  words,  Russia  has  completed  a cycle  of  revolu- 
tion. The  old  order  has  disappeared  and  another  has  been 
put  in  its  place. 

There  is  no  other  nation  of  Europe  in  which  the  trans- 
formation has  been  equally  complete.  On  the  other  hand, 
it  must  be  remembered  that  over  a third  of  the  population 
of  Europe  is  in  Russia.  The  revolution  in  Russia  is  there- 
fore a revolution  for  a very  large  share  of  the  European 
people. 


17 


Next  to  Russia,  in  revolutionary  importance,  comes  Ger- 
many. 

The  first  revolution  came  in  Russia,  the  second  in  Ger- 
many. Some  people  think  that  second  place  should  be  given 
to  Hungary,  but  for  several  reasons — the  backwardness  of 
the  people;  the  lack  of  industrial  organization;  the  smallness 
and  vulnerability  of  the  country;  and  the  weakness  of  the 
leaders — the  Hungarian  Revolution  was  never  of  the  first 
importance.  The  breakdown  of  the  old  order  was  more 
complete  there  than  it  was  in  Germany,  but  the  possibilities 
of  reconstruction  are  far  less. 

Germany  is  a sick  nation.  Its  international  economic  life 
was  built  on  its  foreign  markets,  its  commerce  and  its  bank- 
ing. These  have  been  virtually  destroyed  by  the  war.  Its 
national  spirit  depended  on  a concept  of  military  supremacy. 
That  has  been  crushed.  Germany  was  a great  capitalist  and 
militarist  empire ; she  is  reduced,  for  the  time  being  at  least, 
to  a position  of  minor  importance  among  the  European 
nations. 

The  German  people  are  discouraged  and  bitter.  They  are 
discouraged  because,  under  the  Treaty,  they  see  no  way  to 
resume  their  national  life.  They  are  bitter,  because  they  feel 
that  they  were  made  the  victims  of  a world  conspiracy,  led 
by  the  French. 

Germany  has  had  a political  revolution.  The  Kaiser  and 
his  power  of  decision  have  been  replaced  by  a republic  with 
a constitution  that  is  advanced,  as  republican  constitutions 
go.  But  those  who  sought  to  extend  the  German  Revolution 
and  to  make  it  economic  as  well  as  political  were  met  with 
machine  guns  in  the  hands  of  one  faction  of  the  Socialist 
Party. 

The  wave  of  Spartacide  agitation  has  abated  for  the  mo- 
ment, but  the  majority  Socialists  are  in  disrepute,  and  the 
Independent  Socialists,  who  are  advocating  approximately 
the  same  thing  for  which  the  Spartacides  did  their  fighting, 
are  gaining  in  strength.  How  far  the  Germans  are  restrained 
by  a feeling  of  weariness  and  despondency,  and  how  far  by 
the  fear  of  Allied  attack  and  occupation  in  case  of  an  eco- 
nomic overturn,  it  is  difficult  to  say.  Both  factors  enter 
powerfully  into  the  situation. 


18 


The  leaders  of  the  Independent  Socialist  Movement  ex- 
plain the  matter  in  this  way : “We  have  watched  the  Russian 
Revolution,”  they  say,  “and  we  are  trying  to  learn  from  their 
experience.  Their  greatest  failure  was  the  failure  to  main- 
tain the  production  of  the  necessaries  of  life.  Such  a failure 
may  be  possible  in  Russia,  with  its  vast  agricultural  area 
and  its  considerable  peasant  population.  Here,  in  Germany, 
we  have  only  a relatively  small  number  of  persons  on  the 
land.  Our  people  are  living  in  cities  and  towns,  where  they 
are  dependent  for  their  livelihood  on  organized  industry.  If, 
in  the  course  of  the  German  Revolution,  there  should  be  any 
considerable  breakdown  in  the  productive  machinery,  the  re- 
sults would  be  far  more  disastrous  than  they  have  been  in 
Russia.  Therefore  we  must  bide  our  time.  Beside  that, 
the  Allied  troops  are  already  on  German  soil.  In  case  of  a 
revolution,  they  could  over-run  the  country  in  a few  days’ 
time.  We  have  no  such  stretches  of  impassable  country  as 
those  which  separate  Moscow  from  the  remainder  of 
Europe.” 

Thus  are  the  German  leaders  thinking.  They  are  plan- 
ning for  a scientific,  ordered  revolution,  managed  in  true 
German  form.  Whether  they  can  carry  the  country  through 
the  coming  winter  on  such  a “watchful  waiting”  program, 
remains  to  be  seen. 

Meanwhile,  the  mantle  of  active,  revolutionary  activity 
has  descended  upon  Italy,  where  the  red  flag  has  been  run 
up  over  some  of  the  largest  factories  and  some  of  the  finest 
estates. 

Throughout  the  war,  the  revolutionary  movement  was 
strong  in  Italy.  The  Socialist  Party  remained  consistently 
an  anti-war  party,  with  a radical  and  vigorous  propaganda. 
The  Armistice  found  the  Socialist  and  Labor  Movements  in 
the  North,  with  a growing  movement  in  the  South  for  the 
organization  of  Agricultural  Leagues. 

The  Socialist  propaganda  in  Italy  has  been  very  consistent 
and  telling.  The  paper  “Avanti,”  circulating  in  all  parts  of 
the  country,  has  been  an  agency  of  immense  importance.  The 
war,  the  Treaty,  the  rising  cost  of  living,  the  growing  tax- 
ation— all  have  prepared  the  ground  for  the  work  that  the 

19 


propagandists  have  been  doing.  Their  message  has  been: 
“Make  ready  for  the  taking  over  of  the  industries ! Learn 
what  you  can,  so  that,  when  the  day  comes,  each  will  play 
his  part.  When  you  get  the  word,  take  over  the  works ! 
There  must  be  no  violence — that  only  helps  the  other  side. 
Do  not  linger  on  the  streets,  you  will  be  shot.  Remain  at 
home  or  stay  in  the  factories  and  work  as  you  never  worked 
before !” 

That,  in  essence,  has  been  the  Italian  Socialist  propaganda 
— simple,  clear  and  direct,  and  that  is,  in  effect,  what  the 
workers  have  done. 

The  whole  matter  was  precipitated  by  a strike  and  lock- 
out among  the  metal  workers  who  began  to  occupy  the  fac- 
tories, to  hoist  the  red  flag  and  then  to  go  on  with  produc- 
tion. The  employers  evidently  regarded  the  movement  as 
a joke — when  the  raw  materials  are  exhausted,  they  said,  the 
thing  will  stop  of  itself.  Besides,  they  said,  what  can  the 
workers  do  with  the  products?  Their  contentions  would 
have  been  correct  had  the  movement  been  confined  to  the 
metal  industry ; but  it  spread — spread  with  astonishing  rapid- 
ity— to  the  factories  in  other  industries ; to  the  ships ; to  the 
smaller  railroads ; to  the  estates.  There  was  little  violence. 
The  workers  avoided  collisions  with  the  police  and  the  mili- 
tary. It  was  not  riots  they  wanted,  but  the  factories. 

The  returned  soldiers  have  been  a factor  of  large  import- 
ance in  the  Italian  Revolution.  They  were  radical  through- 
out the  war.  The  peace  made  them  revolutionists.  “The 
Proletarian  League  of  the  Great  War”  is  an  organization 
that  has  sprung  up  during  the  past  few  months.  It  is 
affiliated  with  “The  International  of  Former  Soldiers,” 
which  comprises  the  radical  elements  among  the  ex-service 
men  of  Great  Britain,  Germany,  France,  Austria,  Italy  and 
a number  of  the  smaller  countries.  There  are  over  a million 
dues-paying  members  in  this  International,  and  their  avowed 
object  is  propaganda  against  war  and  in  favor  of  an  economic 
system  in  which  the  workers  are  in  control  of  the  industries. 
It  was  this  group  in  Italy — particularly  in  the  South — that 
carried  through  the  project  of  occupying  the  estates. 

“But  why  does  not  the  Italian  Government  do  something?” 
demands  the  astonished  American. 


20 


The  answer  is  very  simple — the  Italian  Government,  like 
almost  all  of  the  other  capitalist  governments  of  Europe,  is 
weak.  The  taxes  that  it  must  collect  are  so  high,  and  its 
failure  to  function  is  so  complete,  that  it  cannot  command 
the  support  of  its  people. 

There  is  another  answer — equally  simple — that  has  been 
given  to  me  by  a number  of  people  who  have  made  a careful 
study  of  the  Italian  situation.  Italy  is  having  a new  birth. 
Once  before  the  Renaissance  came  out  of  Italy,  and  the 
young  Italian  men  are  preparing  to  have  it  come  from  there 
again.  It  was  the  Italian  cities  that  were  the  first  to  add  to 
their  other  burdens  the  care  of  the  starving  Austrian  chil- 
dren. There  is  a new  life  in  Italy,  and  even  the  members  of 
the  bourgeoisie  are  calling  for  an  organization  of  society 
that  will  function  with  greater  efficiency  than  that  of  the 
pre-war  capitalism. 

Whatever  may  be  the  motive  that  is  animating  the  Italian 
Government  in  its  present  policy,  certain  it  is  that  the  work 
of  building  the  new  order  of  society  has  progressed  with  an 
unexpected  rapidity  and  vigor,  and  that  it  has  been  carried 
out,  not  by  any  pre-determined,  centralized  plan,  but  by  the 
workers,  who  have  determined,  in  each  given  locality,  that 
the  time  for  action  had  come. 

A word  about  the  situation  in  France,  which  is  still  going 
through  the  motions  of  being  a capitalist  empire.  The  gov- 
ernment is  just  floating  a new  loan  at  6 per  cent.,  to  meet 
running  expenses.  This  loan,  of  an  indetermined  amount, 
comes  on  the  heels  of  a revenue  law  that  puts  seven-eights 
of  the  tax  burden  on  the  consumers,  and  it  is  to  be  added 
to  the  37  billions  of  francs  that  have  already  been  piled  up 
in  the  form  of  a national  debt.  There  are  more  than  120 
millionaires  in  the  Chamber  of  Deputies,  and  since  his  ac- 
cession to  the  Premiership,  Millerand  has  served  this  group 
to  the  best  of  his  ability — squeezing  Germany;  supporting 
Poland;  attacking  Russia;  recognizing  Wrangel, — in  short, 
forcing  upon  Europe  a policy  of  imperialism  that  is  quite 
in  keeping  with  the  status  of  1913,  but  that  can  hardly  be 
expected  to  survive  the  pressing  demands  of  the  present 
revolutionary  epoch. 


21 


The  devastated  areas  of  France  are  still  in  a pitiful  state 
of  ruin — and  they  included  the  richest  industrial  areas  of  the 
country.  There  is  unemployment  in  the  seaports  and  in  the 
textile  centres.  The  people  are  groaning  under  the  tax  bur- 
dens. Prices  have  doubled  within  the  past  year.  A few 
are  growing  fabulously  rich,  and  since  they  are  in  physical 
control  of  the  government,  they  have  succeeded  in  having 
the  tax  schedules  so  adjusted  that  they  pay  a very  small 
share  of  the  cost  of  keeping  the  old  machine  running.  It  is 
probable  that  in  no  other  corner  of  the  world  have  the 
profiteers  had  so  unfettered  an  opportunity  as  they  have  had 
in  France  since  the  beginning  of  1915 — and  the  people 
know  it. 

It  is  hard  to  find  a worker  in  France  who  is  not  a So- 
cialist. The  labor  unions  count  two  millions  of  members. 
There  are  over  a thousand  cities  and  towns  that  elected  So- 
cialist officials  in  December,  1919,  and  the  sentiment  is  far 
stronger  now  than  it  was  at  that  time. 

On  the  other  hand,  the  workers  suffered  a severe  defeat 
as  a result  of  the  strike  of  May,  1920,  which  was  begun  as 
a “nationalization  strike”  by  the  railroad  workers,  and  which 
ended  as  a disastrous  general  strike,  poorly  organized  and 
very  badly  led.  To  make  matters  worse  for  the  workers, 
Millerand,  in  control  of  the  government  forces,  has  only  just 
emerged  from  the  radical  camp.  He  knows  the  workers  and 
their  movement.  He  struck  quickly  and  decisively,  and  for 
the  moment,  he  has  won.  Between  five  and  six  thousand  of 
the  leaders  of  the  strike  went  to  prison;  25,000  of  the  leading 
spirits  in  the  railway  unions  were  discharged;  proceedings 
were  instituted  against  the  General  Federation  of  Labor,  and 
a campaign  of  misrepresentation  and  bitter  attack  was  carried 
on  through  the  press  against  the  whole  labor  movement. 
The  workers  refer  to  this  episode  as  a “check.”  They  regard 
it  as  nothing  more,  and  their  propaganda  is  being  carried 
on  with  renewed  vigor. 

The  capitalist  imperialism  of  France,  with  its  debts;  its 
taxes;  its  adverse  exchange  rate;  its  depreciated  paper  cur- 
rency; its  Syrian  War;  its  Polish  Campaign,  and  its  load 
of  ruling-class  ambition,  moves  toward  the  coming  winter 
with  steps  that  are  none  too  steady.  The  old  order  remains 

22 


— that  is  the  most  that  can  be  said  of  it.  How  long  it  will 
survive  is  a matter  of  considerable  speculation.  Prices  are 
exceptionally  high ; coal  is  very  scarce ; work  is  hard  to  get ; 
the  people  are  asking,  “How  are  we  to  live  ?”  It  is  a critical 
juncture. 

The  capitalist  system  is  stronger  in  Great  Britain  than  in 
any  of  the  other  warring  countries  of  Europe.  Before  the 
war,  it  rested  on  a surer  foundation.  During  the  war,  it 
withstood  better  than  any  other  the  financial  and  industrial 
demands.  Since  the  war,  it  has  made  the  best  recovery. 

There  is  an  imperial  pride  and  a feeling  of  imperial  soli- 
darity in  Great  Britain  that  has  no  parallel  in  any  other  capi- 
talist country  outside  of  the  United  States,  and  possibly 
Japan.  The  British  working  class  feels  it  to  a degree;  the 
British  middle  and  upper  classes  are  swathed  in  it.  For  this 
feeling,  there  is  a broad  foundation  in  fact.  Not  since  the 
days  of  Imperial  Rome  has  any  nation  held  so  large  a 
measure  of  world  power  and  held  it  for  so  long.  As  mer- 
chants, as  soldiers,  as  colonizers,  as  exploiters,  the  British 
are  to-day  without  peer. 

Great  Britain  is  the  most  successful  of  the  capitalist 
states.  With  her,  capitalism  is  at  its  best,  and,  all  other 
things  being  equal,  the  capitalist  system  should  last  with  her 
longer  than  with  her  less  efficient  rivals.  And,  indeed,  that 
is  the  present  outlook.  At  any  rate,  the  other  capitalist  na- 
tions of  Europe  regard  Great  Britain  as  the  inner  citadel  of 
European  capitalism. 

The  British  Labor  Movement  is  seeking  to  take  this  citadel 
from  within. 

The  British  people,  like  the  people  of  all  the  other  bellig- 
erent countries,  are  suffering  from  high  rents,  high  prices, 
unemployment  and  profiteering.  Reasons  for  discontent 
abound,  and  the  visitor  to  the  British  Isles  need  not  go  far 
to  discover  them. 

This  discontent  with  the  present  system  of  British  capi- 
talism does  not  take  the  form  of  revolutionary  propaganda. 
On  the  continent,  the  word  “revolution”  is  on  the  tongue  of 
every  labor  speaker,  even  among  the  most  conservative.  Not 

23 


so  in  Great  Britain.  There  one  must  travel  far  and  listen 
long  before  hearing  it.  There  are  revolutionists,  of  course, 
but  the  stolid  British  temper  does  not  vibrate  to  the  word 
“revolution.”  At  the  same  time,  in  the  British  Isles,  the 
revolution  is  afoot.  Those  who  are  directing  it  want  to  have 
the  changes  made  gradually;  they  are  anxious  to  take  each 
step  in  the  light  of  full  discussion,  but  they  are  none  the  less 
determined  that  the  steps  shall  be  taken. 

The  British  Labor  Movement  is  a formidable  affair.  There 
are  not  more  than  a hundred  thousand  members  in  all  of  the 
Socialist  parties,  in  the  Independent  Labor  Party  and  in  the 
Communist  Party  combined.  There  are  between  six  and 
seven  millions  of  members  in  the  trade  unions. 

Americans  have  difficulty  in  realizing  the  meaning  of  these 
figures.  If  there  were  an  equal  proportion  of  union  mem- 
bers in  the  United  States,  instead  of  the  present  four  and  a 
half  millions  there  would  be  between  twelve  and  fifteen 
millions.  Every  important  industry  is  organized  in  Great 
Britain,  and  in  most  cases  they  are  organized  close  to  one 
hundred  per  cent. 

Many  of  these  union  men  are  conservative.  On  the  other 
hand,  many  of  the  leaders  and  myriads  of  the  followers  are 
eager  to  announce  themselves  as  in  favor  of  everything  that 
the  most  radical  of  the  French  Syndicalists  and  the  recog- 
nized leaders  of  the  Russian  Soviets  are  standing  for.  They 
propose  different  methods,  but  they  are  aiming  at  the  same 
objective.  The  development,  during  the  war,  of  the  shop- 
steward  movement  gave  an  inkling  of  the  path  that  the 
British  Labor  Movement  hoped  to  take.  The  movement 
came  in  spite  of  some  of  the  more  conservative  leaders,  but 
it  came,  none  the  less. 

There  is  a solidity  about  the  British  Labor  Movement  that 
must  be  seen  in  order  to  be  understood.  British  workers 
feel  it  and  rely  on  it. 

The  character  of  this  solidity  was  well  illustrated  at  the 
Portsmouth  Congress  in  September,  1920.  The  miners  had 
just  taken  a strike  vote  that  showed  the  sentiment  about 
three  to  one  in  favor  of  the  walk-out.  The  capitalist  papers 
immediately  seized  upon  this  divided  vote  as  a sign  that  the 

24 


labor  movement  was  about  to  split.  The  fact  was  played 
up  day  after  day,  and  there  were  numerous  predictions  as 
to  the  sides  that  the  various  factions  would  take  when  it 
came  to  the  Portsmouth  Congress.  In  short,  the  press 
went  out  to  split  the  Congress,  and  their  best  men  worked 
overtime  at  the  task. 

The  amount  of  publicity  that  was  given  to  the  situation 
might  have  wrecked  a less  experienced  group  of  men  than 
the  leaders  of  the  British  movement.  But  they  were  on  to 
the  game.  They  went  to  Portsmouth  determined  not  to  be 
split.  There  were  nearly  a thousand  delegates  on  the  con- 
vention floor,  and  in  a number  of  cases,  matters  were 
brought  up  that  threatened  a serious  division.  By  mutual 
consent  these  matters  were  laid  aside  until  some  more 
auspicious  time.  The  Congress,  after  a six-day  session, 
adjourned  as  a solidly  united  body. 

Yet  there  was  no  mistaking  the  temper  of  the  Congress. 
It  throbbed  with  suppressed  enthusiasm  at  every  mention  of 
vSoviet  Russia.  When  Smillie  rose,  with  his  constant  reiter- 
ation of  the  Socialist  position,  in  theory  as  well  as  in  name, 
he  was  cheered  to  the  echo.  The  Congress  was  for  a “na- 
tionalization” that  would  give  the  control  of  the  industries 
into  the  hands  of  the  workers. 

Perhaps  the  best  test  of  the  strength  of  the  British  Labor 
Movement  came  in  the  summer  of  1920,  over  the  prospective 
war  with  Russia.  Warsaw  was  threatened.  Its  fall  seemed 
imminent,  and  both  Millerand  and  Lloyd-George  made  it 
clear  that  the  fall  of  Warsaw  meant  war.  The  situation  de- 
veloped with  extraordinary  rapidity.  It  was  reported  that 
the  British  Government  had  dispatched  an  ultimatum.  The 
French  Labor  Movement,  which  had  just  finished  the  cele- 
bration of  Jaures  Day,  looked  about  wonderingly;  the 
Italian  Movement  shook  itself.  In  Britain,  the  Labor  Move- 
ment acted  with  a strength  and  precision  that  swept  the  Gov- 
ernment off  its  feet  and  compelled  an  immediate  reversal  of 
policy. 

Over  night,  the  workers  of  Great  Britain  were  united  in 
the  Council  of  Action.  As  originally  constituted,  the  “Labor 

25 


and  Russia  Council  of  Action”  consisted  of  five  representa- 
tives each  from  the  Parliamentary  Committee  of  the  Trades 
Union  Congress,  the  Executive  Committee  of  the  Labor 
Party  and  the  Parliamentary  Labor  Party.  To  these  fifteen 
were  added  eight  others,  among  whom  were  representatives 
of  every  element  in  the  British  Labor  Movement.  This 
Council  of  Action  did  three  things — it  notified  the  Govern- 
ment that  there  must  be  no  war  with  Russia;  it  organized 
meetings  and  demonstrations  in  every  corner  of  the  United 
Kingdom  to  formulate  public  opinion;  it  began  the  organ- 
ization of  local  councils  of  action,  of  which  there  were  three 
hundred  within  four  weeks.  The  Council  of  Action  also 
called  a special  conference  of  the  British  Labor  Movement 
which  met  in  London  on  August  13.  There  were  over  a 
thousand  delegates  at  this  conference,  which  opened  and 
closed  with  the  singing  of  the  “Internationale.”  When  the 
principal  resolution  of  endorsement  was  passed,  approving 
the  formation  of  the  Council  of  Action,  the  delegates  rose 
to  their  feet,  cheered  the  move  to  the  echo,  and  sang  the 
“Internationale”  and  “The  Red  Flag.”  The  closing  resolu- 
tion authorized  the  Council  of  Action  to  take  “any  steps  that 
may  be  necessary  to  give  effect  to  the  decisions  of  the  Con- 
ference and  the  declared  policy  of  the  Trade  Union  and 
Labor  Movement.” 

The  “Council  of  Action”  is  regarded  as  unconstitutional 
by  the  Government,  but  as  yet  no  move  has  been  made  to 
interfere  with  its  functioning.  Organized  for  a specific  pur- 
pose, the  central  Council  has  made  no  effort  to  extend  its 
activities  beyond  this  field.  The  situation  is  far  different 
among  the  local  councils,  of  which  there  are  now  more  than 
three  hundred,  situated  in  every  important  industrial  centre 
in  the  British  Isles.  Among  the  miners  in  Wales  and  the 
ship-workers  in  Scotland,  these  local  councils  are  looked 
upon  as  Soviets,  and  their  members  are  prepared  to  function 
in  that  capacity  whenever  the  need  may  arise. 

Meanwhile,  the  Council  of  Action  continues  to  sit — an 
unofficial  body  backed  by  an  industrial  mandate  that  makes 
it  far  more  powerful,  in  a negative  sense,  than  the  Cabinet. 
The  British  Labor  Movement  seems  to  be  united  to  a man 


26 


on  this  Russian  question,  and  on  that  issue  the  Council  of 
Action  could  undoubtedly  stop  every  wheel  in  the  United 
Kingdom  on  twenty-four  hours’  notice. 

That  is  the  present  position  in  the  “Citadel  of  European 
Capitalism.”  The  Government  is  forced  to  deal  with  a body 
that,  for  all  practical  purposes,  is  determining  the  foreign 
policy  of  the  Empire.  Behind  that  Council  is  an  organized 
group  of  between  six  and  seven  millions  of  workers  who  are 
out  to  get  the  control  of  industry  into  their  own  hands,  and 
to  do  it  as  speedily  and  as  effectually  as  circumstances  will 
permit. 

So  much  for  specific  situations  in  Russia,  Germany,  Italy, 
France  and  Great  Britain.  The  revolution  is  afoot  in  the 
smaller  countries  as  well,  but  the  facts  of  these  five  countries 
are,  for  all  practical  purposes,  the  facts  of  Europe. 

On  the  continent,  capitalism  is  dying  or  dead.  In  Great 
Britain  it  survives — for  a time.  In  Russia  the  new  order 
of  society  has  been  constituted,  and  the  workers  of  the  other 
great  countries  are  watching  eagerly  to  observe  the  outcome. 
In  Italy,  a movement  to  take  over  the  industries  is  under 
way.  Germany  and  Great  Britain  are  promised  an  orderly, 
scientific  revolution.  French  reaction  struts  its  little  hour 
upon  the  stage  of  a decadent  imperialism,  paying  its  bills 
with  paper  money  and  borrowing  to  meet  the  interest  on  its 
debts.  The  masters  of  yesterday  have  reached  the  point 
where  they  can  see  their  power  dissolving.  The  directors 
of  the  new  order  are  girding  themselves  for  action. 

No  American  who  has  not  seen  Europe  since  the  war  can 
form  any  concept  of  the  completeness  with  which  the  five 
years  of  struggle  crushed  the  old  form  of  society;  of  the  ter- 
rible suffering  that  is  accompanying  the  transition  period  in 
some  of  the  central  and  eastern  countries;  of  the  sublime 
courage  and  faith  with  which  the  builders  of  the  new  world 
are  sacrificing  and  laboring;  of  the  confidence,  in  the  heart 
of  the  ordinary  man  and  woman,  that  when  the  time  comes, 
they  will  be  able  to  do  their  part  in  making  the  new  society 
a success. 


27 


Europe  has  lived  through  six  awful  years.  There  are 
more  years  ahead — equally  terrible.  The  coming  winter  will 
be  a test  in  practically  every  one  of  the  continental  countries. 
Yet  hope  springs,  and  the  people  see  a new  day  before  them. 

That  is  really  all  that  I intended  to  say,  but  I should  like 
to  add  just  a word  that  I wish  you  would  repeat,  for  me, 
to  those  Americans  who  are  convinced  that  you  can  prevent 
a revolution  with  an  injunction. 

When  Europe  entered  the  war,  in  1914,  her  people  had 
no  idea  of  revolution.  They  were  out  for  “Victory”  and 
“Glory/’  In  most  of  the  countries  there  abounded  the  same 
kind  of  nationalism  that  is  so  generally  met  with  in  the 
United  States  at  the  present  time,  and  that  has  as  its  motto : 
“America  first !”  They  fought  for  national  advantage ; they 
gained  world  revolution. 

In  other  words,  they  got  something  very  different  from 
the  thing  they  went  out  after.  Also,  they  gained  a great 
deal  of  experience  that  I should  like  to  summarize,  for 
Americans,  in  a few  sentences.  They  learned : 

1.  That  a well  organized  and  apparently  sturdy  civiliza- 
tion, the  work  of  generations,  can  be  destroyed  by  a 
war  within  a few  years. 

2.  That  the  thing  called  “revolution”  is  a matter  of  neces- 
sity, not  of  choice,  since  it  consists  in  the  break-up  of 
one  form  of  society,  and  the  organization  of  a new  form, 
better  designed  to  meet  the  needs  of  the  people. 

3.  That  revolution  is  therefore,  in  the  first  instance,  the 
result  of  the  failure  of  the  existing  order  of  society. 
Those  who  are  interested  in  preventing  revolution  must 
therefore  turn  their  attention,  first,  to  the  problem  of 
making  society  serve  the  needs  of  those  who  live  in  it. 
If  they  cannot  succeed  in  this,  the  coming  of  revolution 
is  only  a matter  of  time  and  of  opportunity. 

4.  That  the  actual  process  of  dissolution  is  a nasty  busi- 
ness— a strain  on  everyone.  The  ruling  classes  of 
Europe  have  been  compelled,  as  one  might  say,  to  watch 

28 


their  own  death  struggles  and  to  sit  in  at  their  own 
funerals.  That  is  a task  which  no  one  can  be  expected 
to  relish. 

5.  The  violence,  accompanying  the  recent  European  revo- 
lutions, has  apparently  been  begun,  in  every  instance, 
by  those  members  of  the  ruling  class  who  refused  to  be 
put  aside,  or  by  some  government  representing  their  in- 
terests. There  is  no  instance,  so  far  as  I am  aware, 
where  the  violence  has  been  started  by  the  masses  of  the 
revolting  peoples.  On  the  contrary,  in  Russia,  in  Hun- 
gary, in  Germany  and  in  Italy  the  people  went  out  of 
their  way  to  avoid  disturbance.  In  all  of  these  coun- 
tries it  was  the  police,  the  soldiers,  the  counter-revolu- 
tion, or  an  invader  that  began  the  trouble. 

6.  That  during  a revolution,  as  well  as  at  all  other  times, 
the  people  must  be  fed,  clothed,  housed,  and  rendered 
as  comfortable  as  the  circumstances  will  permit. 

7.  That,  therefore,  no  pains  should  be  spared,  by  those 
interested  in  the  establishment  of  a new  society,  to  see 
that  production  is  maintained;  that  the  machinery  of 
distribution  is  in  working  order;  that  the  schools  and 
the  press  and  the  various  forms  of  recreation,  education 
and  amusement  are  placed  on  a basis  of  superior  effi- 
ciency, and  above  all,  that  life  continues  as  peacefully 
as  possible  during  the  entire  period  of  transition. 

8.  That  during  the  period  of  transition,  power  will  be  con- 
centrated in  the  hands  of  a few  persons — more  or  less 
representative — exactly  as  it  was  concentrated  during 
the  American  Revolution.  That  such  a concentration 
is  temporary,  and  must  be  regarded  as  such  not  only  by 
the  masses  of  the  people  but  also  by  those  who  exercise 
the  power. 

9.  That,  finally,  the  success  of  the  revolution,  in  providing 
a better  opportunity  than  that  afforded  by  the  old  so- 
ciety, for  life  and  happiness,  depends  upon  the  intelli- 
gence, the  courage,  the  foresight,  the  idealism  and  the 
scientific  knowledge  of  those  upon  whom  the  responsi- 
bility falls  for  directing  the  change. 

29 


Europe,  during  the  last  six  years,  has  learned  some  valu- 
able lessons,  for  which  she  has  paid  a bitter  price.  There  is 
not  an  American  man  or  woman,  interested  in  the  future  of 
his  country,  who  can  afford  to  ignore  this  experience. 

Here’s  hoping  that  our  people  may  be  wise  enough  to 
profit  by  the  failures  and  successes  over  here. 

Scott  Nearing. 


30 


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33>*74 
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r 


By  SCOTT  NEARING 


CONTENTS 


I.  TWO  EUROPES 


II.  EUROPE  TODAY 

1.  The  Economic  Front 

2.  Bread 

3.  Education  and  the  Refinements 

4.  The  State 

5.  War 

6.  Fascism  and  Revolution 

a.  Italy’s  XHIth  year 

b.  Hitler’s  Germany 

c.  The  October  uprising  in  Spain 


7.  Sovietism 


a.  After  two  years 

b.  A Soviet  giant 

c.  Soviet  steel 


III.  WHAT  LIES  AHEAD 


1. 

2. 


The  Whirlwind 
Europe  West 


a.  Income  and  population 

b.  The  Christian  Corporate  State 

c.  Class  relations 

d.  International  alignments 

e.  The  drift  toward  war  and  revolution 


i 


i 


-I* 


3.  Europe  East 

a.  Socialist  construction 

b.  Increase  in  production  and  income 

c.  Liquidating  classes  and  the  state 

d.  Security  and  opportunity 

e.  Equalizing  social  life 

f.  The  Soviet  Union  and  the  world 

4.  Two  Europes  in  Conflict 


3 


I 


FOREWORD 


During  recent  years  the  author  has  been 
a frequent  visitor  to  Europe  and  a close 
student  of  its  economic  and  political  devel- 
opment. In  the  late  summer  and  autumn 
of  1934  he  had  an  opportunity  to  see  it  again 
at  first  hand.  Starting  in  Italy  he  visited 
the  Danubian  countries,  travelled  across  the 
Soviet  Union  as  far  as  the  Ural  Mountains 
on  the  borders  of  Asia,  and  returned 
through  Poland,  Germany,  Belgium,  France 
and  Spain  to  the  United  States.  The  fol- 
lowing pages  contain  some  of  the  obser- 
vations made  in  the  course  of  that  journey, 
together  with  conclusions  as  to  the  main 
economic  and  political  trends. 


% 


EUROPE  — 

WEST  AND  EAST 


I.  TWO  EUROPES 

Treaties  signed  after  the  War  of  1914  drew  a north  south  line 
from  the  Arctic  Ocean  to  the  Black  Sea,  dividing  Europe  into  two 
parts  of  equal  size.  On  the  West  side  of  the  division  line  are  half 
a dozen  large  states, — Poland,  Germany,  France,  Great  Britain, 
Spain,  Italy, — and  a score  of  smaller  ones.  On  the  East  side  of 
the  line  is  the  Union  of  Socialist  Soviet  Republics. 

West  Europe  has  kept  the  main  features  of  its  pre-war  economic 
system.  Land  and  other  natural  resources,  mines,  factories,  banks 
and  stores  are  owned  and  operated  for  profit  by  private  individuals 
or  by  corporations.  No  general  economic  plan  binds  together  the 
lumbering,  mining,  manufacturing,  transport  and  merchandising. 
On  the  contrary,  each  business  goes  its  own  way,  subject  to  such 
regulations  and  restrictions  as  the  government  may  impose.  Those 
who  are  successful  in  the  competitive  struggle  for  wealth  and  power 
accumulate  property,  grow  rich,  receive  large  incomes  from  their 
investments,  and  control  political  and  social  life.  The  entire  system 
is  built  upon  the  exploited  labor  of  wage-earners  and  land  workers. 

Each  of  the  twenty-odd  countries  of  West  Europe  has  an  in- 
dependent political  apparatus  consisting  of  legislature,  courts, 
schools,  army,  police,  tax-collectors,  tariff  regulations,  etc.,  main- 
tained and  directed  in  the  interest  of  the  ruling  class  of  that  par- 
ticular country.  Since  the  ruling  classes  of  neighboring  countries 
are  continually  reaching  out  for  additions  to  their  wealth  and 
power,  there  is  a ceaseless  rivalry  and  conflict  to  determine  who 
shall  have  and  who  shall  lose  the  most  valuable  wheat  land,  oil 
fields,  markets,  naval  stations  and  colonies.  Consequently,  West 
Europe  is  honeycombed  with  intrigue,  espionage,  bribery,  cor- 


5 


6 


EUROPE — WEST  AND  EAST 


ruption,  secret  agreements,  diplomatic  understandings  and  alliances 
that  are  inseparably  connected  with  the  efforts  of  rival  ruling 
classes  to  grow  rich  and  powerful  at  the  expense  of  their  neighbors. 

The  owning  classes  of  West  Europe,  as  in  pre-war  days,  control 
the  press,  the  schools,  the  churches,  the  radio,  the  theatres, — in 
fact,  all  of  the  ordinary  avenues  by  means  of  which  news  and  ideas 
are  distributed  and  opinions  are  formed.  Through  these  avenues 
they  are  busy  night  and  day  spreading  propaganda  in  favor  of  the 
social  system  which  they  control,  and  against  any  other  system. 

Meanwhile  they  live  in  a society  built  upon  class  divisions:  at 
the  top,  wanton  luxury;  at  the  bottom,  gnawing  poverty.  In  every 
country  of  West  Europe  the  well-to-do  continue  to  idle,  gamble, 
drink,  travel  and  dabble  in  the  arts.  In  every  country  of  West 
Europe  the  poor  fight  their  desperate  battle  for  bread,  a ray  of 
sunshine,  a breath  of  fresh  air  and  a chance  to  escape  or  to  forget 
the  fearful  conditions  under  which  they  and  their  children  spend 
their  lives. 


West  and  East  Europe  present  a striking  contrast.  East  Europe 
adopted  a new  economic  system  in  1917,  when  the  Russian  work- 
ers drove  landlords  and  business  men  from  the  seats  of  power,  and 
took  upon  themselves  the  responsibility  of  controlling  their  own 
social  destiny.  Resources,  mines,  mills,  factories,  banks  and  stores 
are  socially  owned,  and  are  directed  under  a general  economic  plan 
toward  the  production  of  those  goods  and  services  upon  which 
life  and  well-being  depend.  This  socialization  of  the  means  of 
production  was  made  possible  by  a thorough-going  revolution  that 
replaced  the  entire  structure  of  profit  economy  and  class-divided 
society  by  a dictatorship  of  the  workers,  dedicated  to  the  task  of 
wiping  out  exploitation  and  establishing  a classless  society. 


With  the  new  economic  system  goes  a new  social  system,  based 
upon  planned  cooperation  in  place  of  chaotic  competition  and  self- 
seeking  monopoly.  Since  1917  the  Soviet  Union  has  spoken 
frequently  and  insistently  in  favor  of  disarmament  and  peace. 
Within  its  own  borders  it  has  ended  the  age-old  strife  between 
racial  and  national  minorities  by  adopting  a simple  rule  of  econo- 
mic coordination  and  cultural  autonomy.  The  glaring  contrasts 
between  exploiters  and  exploited,  rich  and  poor,  have  given  place 
to  a society  administered  by  the  Communist  Party,  the  trade 
unions,  the  cooperatives  and  other  mass  organizations  with  tens 
of  millions  of  members.  Sovietism  has  one  major  objective:  to 
guarantee  a decent  living  to  all  workers  and  to  lift  the  mass  cul- 
ture level. 

Anyone  who  travels  from  West  Europe  to  East  Europe  and  back 
again  cannot  fail  to  see  many  striking  differences  between  the  twc 


EUROPE— WEST  AND  EAST 


7 


social  systems.  Still  more  important,  however,  is  the  contrast 
between  the  atmosphere  of  uncertainty  and  fear  that  pervades 
West  Europe  and  the  buoyant  hopefulness  that  meets  one  in  every 
nook  and  corner  of  the  Soviet  Union. 

II.  EUROPE  TODAY 

1.  The  Economic  Front 

Economic  paralysis  is  creeping  over  the  industrial  life  of  West 
Europe.  The  decline  of  production  is  serious  enough,  but  more 
serious  still  is  the  permanent  economic  crippling  that  goes  with 
the  progressive  abandonment  of  machinery  and  the  return  toward 
hand  agriculture  and  hand-craft  village  economy. 

Czechoslovakia  illustrates  the  trend  of  West  European  economy. 
The  country  has  timber,  coal  and  iron;  there  are  steel  works, 
machine  shops  and  factories  ready  to  turn  out  all  varieties  of 
machine  tools  and  agricultural  equipment;  there  are  fertile  lands 
and  a highly  trained  population.  Czechoslovakia  is  equipped  with 
the  raw  materials,  tools  and  labor  power  needed  to  mechanize  its 
farming,  and  yet  the  great  bulk  of  the  farm  work  is  done  with 
hand  tools  or  with  cow-power. 

It  was  a fine  day,  late  in  September  when  our  train  crossed  the 
Austrian  border  into  Czechoslovakia  and  began  the  trip,  north 
west,  toward  the  Polish  frontier.  For  two  hours  we  traversed  a 
rolling  plain.  The  land  is  fertile  and  very  well  tilled.  In  ap- 
pearance it  is  not  unlike  the  prairies  of  Indiana  and  Illinois.  There 
are  few  elevations  and  only  an  occasional  stream.  Fields  could 
be  laid  out  and  tilled  in  units  of  a thousand  or  five  thousand  acres. 
Instead,  the  land  is  divided  according  to  the  old  strip  system,  into 
tiny  plots,  many  of  which  are  not  more  than  thirty  or  forty  feet 
wide.  Even  where  a farmer  owns  a considerable  amount  of  land 
— 50  or  60  acres — it  may  consist  of  a dozen  or  twenty  separate 
strips,  some  of  them  lying  miles  apart. 

The  crops  raised  on  the  Czech  plain  are  well  adapted  to  large- 
scale  farming, — wheat,  rye,  sugar-beets,  alfalfa,  clover,  grass. 
Under  the  strip  system,  however,  the  crops  are  checker-boarded 
across  the  country-side.  One  plot  contains  clover;  the  next  is 
new-ploughed  for  wheat;  the  third  carries  a crop  of  cow  peas; 
the  fourth  raises  sugar  beets. 

On  the  day  of  my  journey  the  harvest  season  was  at  its  height 
and  thousands  of  men  and  women  labored  in  the  fields, — cutting 
alfalfa  and  clover  with  sickles  and  scythes;  raking  up  the  dry  hay 
with  hand  rakes;  digging  potatoes  with  heavy,  three-cornered  mat- 
tocks; broadcasting  wheat  and  rye  by  hand.  In  fifty  miles  of 
farming  I saw  one  tedder,  drawn  by  bullocks,  one  mowing-machine, 


8 


EUROPE— WEST  AND  EAST 


and  two  seeders,  drawn  by  horses.  There  were  no  other  machines. 
Along  the  entire  stretch,  there  was  not  a single  tractor.  Hand 
labor  harvested  the  crops,  and  took  them  into  the  barns  on  wheel- 
barrows, in  hand  carts  and  in  wagons  drawn  by  cattle  and  horses — 
in  the  proportion  of  about  three  cattle  to  each  horse.  Most  of  the 
cattle  were  milch  cows. 

The  land  seems  designed  for  large-scale  machine  farming.  The 
country  has  all  of  the  mills  and  factories  needed  to  build  machines. 
Yet  on  all  these  thousands  of  acres  no  machines  were  in  evidence. 
Human  arms  and  human  backs  were  doing  most  of  the  work,  with 
very  much  the  same  tools  that  have  been  used  for  the  past  six 
or  eight  hundred  years. 

Czechoslovakia  is  but  one  of  a number  of  countries  in  which  like 
conditions  exist.  Poland,  Austria,  France,  Italy  and  parts  of  Ger- 
many present  the  same  picture.  The  post-war  land  division,  the 
agricultural  crisis  of  the  past  ten  years  and  the  recent  wholesale 
drive  for  economic  self-sufficiency  have  merely  intensified  the 
pressure  toward  small-scale  hand  agriculture. 

Even  where  land  is  held  in  great  estates,  as  in  parts  of  Hungary, 
human  muscles  replace  machinery  because  the  farm-hand,  working 
with  his  whole  family  at  a subsistence  wage,  is  cheaper  than  the 
machine. 

In  Hungary,  near  Budapest,  are  great  fields  of  corn,  with  rows 
running  straight  away  for  a quarter  or  half  a mile.  Farm  hands 
—men,  women  and  children,  work  in  teams  of  a dozen  or  twenty 
persons,  chopping  the  weeds  with  mattocks  as  the  field  hands  in 
the  South  chop  cotton. 

“Why  not  use  machines?”  I asked.  “Czechoslovakian  and  Ger- 
man factories,  only  a few  miles  away,  are  ready  to  build  them, 
and  they  would  do  a better  job  on  the  corn  than  these  hand  tools.” 

The  answer  was  conclusive.  “First,  these  people  work  practical- 
ly for  their  keep.  They  are  cheaper  than  machines.  Second,  if 
we  installed  machinery,  the  work  would  be  done  in  a tenth  of 
the  time  and  these  people  would  be  demanding  unemployment 
relief.” 

Over  all  West  Europe  this  second  proposition  holds;  the  work 
must  be  done  by  hand, — in  no  other  way  can  employment  be  pro- 
vided. Machines  are  too  efficient,  too  productive.  They  supply 
all  the  available  markets  with  a small  part  of  the  available  labor 
power.  Scarcity  and  price  economy  can  be  perpetuated  only  on  a 
basis  of  back-breaking  human  toil. 

It  is  for  this  reason  that  an  army  of  hand  workers  cuts  and 
handles  the  heavy  paving  blocks  used  on  the  streets  of  Naples, 
without  the  help  of  even  so  much  as  a wheel-barrow. 

It  is  for  this  reason  that  in  the  construction  of  the  big  concrete 


EUROPE— WEST  AND  EAST 


9 


pier  at  Genoa,  men  with  wheel-barrows  carry  mixed  concrete  and 
bags  of  cement  from  one  part  of  the  job  to  another,  while  another 
gang,  stripped  to  the  waist,  shovels  broken  stone  into  baskets  and 
lugs  it  from  the  barge  to  the  huge  pile  on  the  pier. 

It  is  for  this  reason  that  the  coal  is  removed  from  barges  along 
the  Seville  water  front  by  men  with  hand  shovels  and  carried  in 
long  baskets  up  a gang  plank  into  the  coal  yard. 

These  are  not  isolated  instances  or  random  happenings.  They 
represent  the  present  trend  of  European  economy.  In  the  great 
industrial  centres  of  Germany,  Austria,  Czechoslovakia,  Italy, 
France  and  Great  Britain,  millions  of  workers  are  unemployed. 
Some  of  them  have  been  idle  for  years.  Many  receive  no  relief. 
The  industrial  cities  have  become  centres  of  starvation.  Govern- 
ments that  live  in  daily  fear  of  revolution  dare  not  let  these  mil- 
lions die  of  hunger  in  the  streets.  They  must  either  give  them 
outright  money  relief,  or  else  they  must  make  work  by  setting 
thirty  men  with  baskets  to  do  the  work  of  one  steam  shovel. 

Plunger  is  stalking  the  whole  of  West  Europe.  The  ruling  classes 
have  met  this  menace  in  the  only  way  that  is  open  to  them.  Since 
the  commodity  market  is  already  over-stocked,  the  path  away  from 
mass  starvation  lies  in  the  direction  of  a subsistence  economy. 
The  demand  for  a return  to  subsistence  farming  may  be  heard  in 
Austria,  Italy,  Hungary,  Ireland,  Germany.  In  many  places  the 
level  of  self-sufficiency  has  been  very  nearly  reached. 

Take,  for  example,  an  Austrian  village  with  its  3000  people,  its 
common  pasture  lands  and  village-owned  forests;  its  bakers,  shoe- 
makers, blacksmith,  wagon  builders,  its  saw  mill,  carpenters,  stone- 
masons, store  keepers.  A railroad  runs  near  the  village  and  there 
is  a paved  through-road  nearby.  But  usually  the  mail,  express  and 
freight  that  goes  to  and  from  the  village  in  one  day  could  be  car- 
ried in  a small  truck.  The  village  sends  very  little  into  the  out- 
side world  and  gets  very  little  in  return.  For  all  practical  purposes 
it  feeds,  houses  and  equips  itself. 

Almost  every  family  in  the  village  has  a little  land.  Follow  one 
of  the  men  (a  stone  mason  by  trade,  but  now  unemployed)  through 
a day  of  subsistence  living.  The  wife  milks  the  family  cow  and  the 
family  goat  early  in  the  morning.  Then  both  animals  go  under 
the  care  of  village  herdsmen,  to  feed  in  the  common  pasture. 
Man  and  wife  drink  some  “coffee”  made  from  roasted  barley,  eat 
a piece  of  dry  bread  and  go  out  to  dig  the  family  potatoes. 

This  family  has  four  tiny  strips  of  fertile  land,  each  about  50 
feet  wide  and  150  to  200  feet  long.  It  also  has  one  piece  of  hill 
land,  on  which  it  cuts  hay.  This  year,  potatoes  were  planted  in 
two  of  the  strips  and  the  other  two  were  in  hay. 

The  man  puts  two  heavy  potato  forks  in  a small,  two-wheeled 
home-made  cart,  throws  a strap  over  his  shoulder,  hooks  it  to  the 


10 


EUROPE— WEST  AND  EAST 


cart  and  trudges  down  the  village  street  to  his  lower  potato 
strip — more  than  a mile  from  the  house.  (The  other  potato  strip  is 
nearly  a half  mile  in  the  opposite  direction).  The  wife  will  come 
later,  when  the  house-work  is  finished. 

The  potatoes  have  been  planted  and  hoed  by  hand.  The  rows 
are  about  40  feet  long  and  there  are  28  of  them.  (A  part  of  this 
strip  was  left  in  grass).  The  family  has  planted  potatoes  in  this 
same  spot  for  about  20  years.  Stable  manure  is  used  for  fertilizer. 
No  commercial  fertilizers  are  used  and  the  potatoes  are  not 
sprayed.  This  year  the  crop  is  poor. 

Patiently  the  man  digs.  Presently  the  wife  joins  him  and  they 
work  together.  Every  tiny  potato,  as  big  as  a marble,  is  carefully 
gathered.  The  potato  strip  is  located  on  a very  large  plot  of 
open  valley  land — perhaps,  in  all,  500  acres.  Scores  of  other  men 
and  women  are  also  at  work  on  their  tiny  strips,  digging  potatoes. 
The  air  is  filled  with  the  clang  and  clatter  made  by  the  digging 
forks  on  the  small  stones  that  cover  the  fields. 

Toward  noon  the  wife  goes  back  to  the  house,  lights  a small 
wood  fire,  prepares  lunch  and  brings  it  to  the  potato  field:  potato 
soup,  boiled  potatoes  eaten  with  salt,  and  a dessert  made  from 
meal,  apple  and  an  egg,  stirred  together  and  cooked  like  an  omelet. 
The  drink  is  buttermilk.  When  the  meal  is  finished  they  rest  for 
a few  moments  while  the  man  smokes  his  pipe,  and  then  they  dig 
more  potatoes. 

At  sunset  they  collect  the  results  of  the  day’s  work  and  load 
the  potatoes  on  the  cart.  The  man  pulls  in  front,  the  woman 
pushes  behind.  In  half  an  hour  they  are  back  at  the  house.  There 
the  woman  makes  coffee  from  ground  figs,  and  with  it  they  eat  dry 
bread.  By  nine  they  have  gone  to  bed.  They  must  be  up  the 
next  morning  with  the  sun  and  go  on  with  the  potato  harvest. 

Practically  all  of  the  day’s  food,  most  of  the  tools  and  imple- 
ments, and  much  of  the  clothing  are  home-made.  The  fuel  is 
home-gathered.  The  house  in  which  they  live  is  home-built  of 
village-made  materials.  This  family  buys  no  newspaper.  It  costs 
too  much.  Both  man  and  wife  like  to  read.  For  a time  they  took 
a weekly,  printed  in  a neighboring  town,  but  they  had  to  give  it 
up.  The  entire  family  economy  centres  about  a cow,  a goat, 
potatoes,  grass,  a pile  of  home-cut  firewood,  a home-made  cart,  a 
home-made  sled  and  a home-built  house.  With  the  exception  of 
a few  pieces  of  hardware  and  a very  small  supply  of  drygoods  and 
groceries  this  family  lives  on,  year  after  year,  almost  independent 
of  the  outside  'world.  Tens  of  thousands  of  villages  in  Central 
Europe  are  made  up  of  just  such  families. 

Or  take  a farmer  in  Italy,  near  Naples.  He  owns  20  acres,  free 
of  mortgage.  On  this  farm  are  three  cows,  two  pigs,  30  chickens, 
one  horse,  olive  trees,  grape  vines,  fruit  trees,  some  wheat  land, 


EUROPE — WEST  AND  EAST 


11 


and  a vegetable  garden.  The  farmer  gets  up  early,  eats  a bunch 
or  two  of  grapes  and  goes  out  to  work.  In  mid-morning  he 
breaks  two  raw  eggs  into  a glass  of  his  own  wine.  At  noon  he 
has  a dinner  of  vegetables  and  rests  for  an  hour  before  going  back 
to  his  afternoon  work.  Twice  a week  his  horse  takes  him  to  a 
market  in  a neighboring  town  where  he  sells  his  surplus  oil,  fruits 
and  vegetables  and  buys  the  few  articles  necessary  to  his  simple 
farm  life.  More  than  nine-tenths  of  the  things  he  uses  are  grown 
or  made  on  his  farm. 

Such  subsistence  farming  has  existed  in  West  Europe  from  time 
immemorial.  Machine  agriculture  threatened  to  undermine  it  for 
a time,  but  the  economic  crisis  is  pushing  Europe  steadily  back 
toward  a subsistence  economy.  With  unemployment  ravaging  the 
cities  and  towns,  there  is  no  other  way  to  be  sure  of  a living. 

The  movement  toward  a subsistence  economy  is  a movement 
toward  the  destruction  of  industry,  trade  and  transport.  The  ser- 
vices of  warehouses,  stores  and  banks  are  not  needed  when 
families  drink  their  own  milk  and  cook  their  own  vegetables.  No 
railroads  or  telegraph  lines  are  required  to  get  hay  and  potatoes 
from  the  field  into  the  barn.  The  nearer  an  economic  system  ap- 
proaches a subsistence  basis  the  more  completely  does  it  dispense 
with  the  huge  industrial  trading  and  transport  apparatus  that  has 
been  built  up  in  such  countries  as  Germany,  Northern  France, 
Belgium  and  Great  Britain,  where  thousands  of  factories  are  closed 
or  on  part-time;  ships  lie  idle  at  the  docks;  locomotives  are  cold  in 
the  round  houses,  and  miles  of  empty  freight  cars  fill  the  freight 
3'ards  in  the  railroad  centres.  West  European  economy  is  reach- 
ing back  toward  subsistence  living  as  a basis  for  surviving  the 
economic  crisis.  As  subsistence  living  is  established,  the  system  of 
commodity  production  for  the  open  market  is  progressively  des- 
troyed. Hard  work  over  long  hours  will  yield  the  narrow  margin 
above  actual  want  that  is  found  in  every  society  based  on  hand 
agriculture, — a margin  that  is  wiped  out  whenever  a bad  harvest 
spreads  famine  over  the  land. 

The  agriculture,  industrial  production,  trade  and  transportation 
of  East  Europe  differ  today  from  West  Europe  as  dawn  differs 
from  twilight.  Most  of  the  farmers  in  old  Russia  lived  under  a 
subsistence  economy.  The  300,000  Russian  villages  were  very 
nearly  self-sufficient  units.  Today  the  Soviet  Uuion  is  moving 
rapidly  away  from  subsistence  farming  and  self-sufficient  village 
life  toward  socialized,  planned,  electrified  machine  economy. 

Anyone  who  crosses  the  line  that  separates  West  Europe  from 
East  Europe  is  brought  face  to  face  with  a new  form  of  economic 
life.  In  East  Europe  the  tiny  plots  of  farm  land  have  disappeared. 
Strip  farming  has  gone.  In  its  place  is  a collectivized  and  partial- 


12 


EUROPE— WEST  AND  EAST 


ly  mechanized  agriculture,  working  with  unit  fields  of  hundreds 
and  thousands  of  acres. 

Under  the  old  system,  in  East  Europe  as  in  West  Europe,  each 
farmer  went  his  own  way,  and  all  too  often  it  led  to  the  poor- 
house.  Poor  tools,  a shortage  of  animal  power,  small  farming 
units  and  ignorance  of  scientific  agriculture  kept  the  land-locked 
millions  just  one  jump  ahead  of  starvation.  At  short  intervals  a 
drought,  a pest  of  locusts  or  some  other  natural  disaster  plunged 
whole  provinces  below  the  starvation  line  and  human  beings  died 
like  flies  in  October. 

Take  a Russian  village  of  3800  souls  that  has  adopted  a col- 
lectivized economy.  Six  years  ago  the  village  land  was  divided 
into  more  than  1500  separate  fields.  Some  families  had  ten  fields. 
Others  had  none.  Today  the  land  is  farmed  collectively  and  is 
divided  into  fields  of  larger  or  smaller  size,  depending  on  the  con- 
formation of  the  land  and  the  crop  to  be  raised.  The  village  is 
organized  into  brigades  of  workers.  Each  brigade  elects  its  leader, 
and  these  leaders  make  up  the  executive  committee  responsible 
for  the  farm  operations.  An  agricultural  expert  advises  the  com- 
mittee as  to  the  location  of  crops,  the  system  of  rotation  to  be 
used,  and  other  technical  problems.  A near-by  tractor  machine 
station  makes  a contract  with  the  village  to  plow,  sow,  reap  and 
thresh  the  grain.  A wheat  field  of  2000  acres  is  laid  out.  Other 
fields,  of  corn,  cabbage,  sunflowers,  and  sugar  beets  are  planted. 
Each  day  the  work  of  the  brigades  is  planned  by  the  executive. 
A dozen  men  and  women  are  at  work  in  one  field,  twenty  in  an- 
other. Not  only  are  machines  used  in  these  villages  for  the  first 
time;  not  only  are  horse  power  and  human  labor  power  organized 
and  directed,  but  the  problem  of  providing  the  workers  with 
adequate  food  is  met  by  establishing  a central  dining  room  with 
field  kitchens. 

Each  house  in  the  village  has  some  garden  space  where  vegetables 
are  raised.  In  addition,  many  of  the  houses  have  a cow,  a pig, 
chickens.  The  work-time  of  each  brigade  and  of  each  worker  is 
kept,  and  pay  is  proportionate  to  work  done.  One  brigade  chal- 
lenges another  to  socialist  competition. 

Electricity  is  brought  to  the  village.  A kindergarten  is  built; 
a reading-room  and  library  opened;  a club  established.  The  vil- 
lage is  farming  and  living  as  a collective  unit. 

There  were  26  million  separate  Russian  farms  in  1928.  Today 
16  million  in  the  most  important  food  regions  have  been  unified 
into  some  240,000  collectives.  In  the  regions  where  industrial 
crops  such  as  cotton  are  raised,  collectivization  is  virtually  com- 
plete. 

Soviet  agriculture  is  not  completely  mechanized.  Many  of  the 
collectives  are  still  compelled  to  do  the  bulk  of  the  work  with 


EUROPE-WEST  AND  EAST 


13 


horses.  But  in  1934  the  Soviet  Union  produced  more  tractors  and 
more  agricultural  machinery  than  any  other  country  in  the  world. 
The  new  plant  at  Cheliabinsk  was  turning  out  40  caterpillar  tractors 
daily,  each  with  60  horse  power.  Within  six  months  this  output 
was  to  be  quadrupled.  The  Kharkov  plant  had  a daily  output  of 
136  tractors,  and  Stalingrad  an  output  of  146.  These  two 
plants  alone  were  building  100,000  tractors  a year.  The  agricultural 
machine  factories  are  working  day  and  night. 

The  transformation  in  agriculture  is  the  most  spectacular  econo- 
mic fact  in  the  Soviet  Union.  But  it  is  only  one  of  many,  equally 
important  in  the  development  of  socialist  construction.  Hand 
industry  is  being  replaced  by  machines.  During  the  period  of  the 
First  Five  Year  Plan,  1928-32,  the  Soviet  Union  turned  its  energies 
to  the  development  of  coal  and  oil;  to  the  erection  of  smelting 
plants  and  steel  mills;  to  the  building  of  factories  for  the  manufac- 
ture of  machine  tools,  machines,  railway  rolling  stock  and  other 
capital  goods.  Between  1928  and  1934  the  number  of  wage  and 
salary  workers  rose  from  10.5  million  to  22.5  million.  The  volume 
of  industrial  output  rose,  year  by  year,  at  more  than  twenty 
percent  per  year.  Old  railroads  were  rebuilt  and  double-tracked. 
New  rail  lines  were  laid  out.  Ships  were  constructed.  By  1933 
the  Soviet  Union  had  become  the  largest  industrial  producer  of 
Europe. 

The  new  economic  life  of  East  Europe  is  being  built  in  con- 
formity with  a general  economic  plan.  Needs  were  estimated,  pos- 
sible productivity  was  determined,  and  the  resulting  plan  furnished 
the  general  framework  within  which  economic  life  developed. 
Today  these  plans  have  provided  the  Soviet  Union  with  a large 
number  of  industrial  and  transport  units  that  are  turning  out  the 
machine  tools  and  equipment  needed  for  the  mechanization  and 
electrification  of  Soviet  economic  life. 


14 


EUROPE— WEST  AND  EAST 


Perhaps  the  most  revealing  contrast  between  the  economic 
decline  in  West  Europe  and  the  economic  advance  in  East  Europe 
appears  in  the  changes  in  industrial  production  during  the  years 
immediately  following  1928.  Industrial  production  for  the  chief 
countries  of  West  and  East  Europe  reveals  a truly  amazing  con- 
trast. The  100  line  in  the  chart  represents  the  level  of  industrial 
production  in  1928.  This  chart  shows  the  industrial  production  of 
West  Europe  hovering  below  the  levels  of  1928.  Industrial  pro- 
duction in  East  Europe  is  not  only  very  far  above  the  1928  levels, 
but  it  has  advanced  consistently  year  by  year. 

While  West  Europe  moves  back  toward  a subsistence  economy, 
East  Europe  moves  ahead  toward  a mechanized,  electrified  econo- 
my. While  West  Europe  is  making  work  for  its  unemployed  mil- 
lions, East  Europe  is  trying  desperately  to  train  a sufficient  number 
of  men  and  women  to  meet  the  demand  for  skill  and  technical 
knowledge.  While  West  Europe  seeks  a level  of  production  in 
terms  of  family  subsistence,  East  Europe  is  building  an  economic 
system  that  will  guarantee  the  livelihood  of  the  entire  producing 
population. 

2.  Bread 

Human  beings  must  eat.  They  may  dress  in  rags  and  live  in 
caves;  they  can  do  without  hospitals,  schools,  libraries,  theaters, 
museums;  but  they  must  have  food. 

West  Europe  for  a time  bought  a large  part  of  its  food  with 
exports  of  manufactured  goods.  The  collapse  of  the  world  market 
has  forced  the  West  European  ruling  classes  to  return  toward  a 
system  of  economic  self-sufficiency. 

The  farmers  of  Europe  have  food.  They  raise  it  themselves. 
Some  of  them  eat  wheat,  rye  and  oats.  More  of  them  eat  potatoes. 
They  raise  some  vegetables  and  fruit  and  have  meat,  eggs,  milk 
and  cheese.  Since  farmers  make  up  more  than  three-fourths  of 
the  population  in  most  European  countries  and  over  half  of  the 
population  in  such  relatively  industrialized  countries  as  Italy  and 
France,  the  European  population,  as  a whole,  has  food.  Unless 
there  is  a drought,  (and  in  West  Europe  droughts  are  seldom  or 
never  widespread),  two-thirds  of  the  European  population  can 
expect  to  dig  its  food  supply  from  the  earth.  The  food  supply 
will  be  meagre,  the  amount  left  over  for  the  comforts  and  refine- 
ments of  life  will  be  near  the  vanishing  point;  but  with  this  meagre 
food  supply,  life  is  possible. 

The  other  third  of  Europe  buys  its  food  with  the  wage  or  salary 
secured  on  some  job.  While  jobs  are  plentiful  and  while  they  pay 
a living  wage,  the  workers  can  eat.  When  jobs  grow  scarce  or 
when  wages  fall  below  the  subsistence  line,  the  workers  go  hungry 


EUROPE— WEST  AND  EAST 


15 


unless  they  can  join  some  bread  line.  Since  1921,  millions  of 
European  workers  have  lived  on  relief. 

The  number  of  unemployed  as  reported  in  1934  by  the  Inter- 
national Labor  Office  was: 


These  figures  represent,  not  the  total  number  unemployed,  but  the 
total  number  officially  registered  in  the  various  countries.  However, 
they  show  that  in  West  Europe  today,  millions  of  workers,  with 
their  tens  of  millions  of  dependents,  are  jobless  and  must  be  fed 
and  housed  through  private  or  public  relief. 

The  existence  of  this  permanent  army  of  the  unemployed — and 
it  lias  occupied  West  Europe  continuously  since  the  soldiers  were 
demobilized  in  1919  and  1920 — makes  it  possible  for  the  purchasers 
of  labor  power,  the  job  owners,  to  pick  and  choose  their  workers. 
If  the  man  or  woman  on  a job  is,  for  any  reason,  unsatisfied  or 
unsatisfactory,  there  are  plenty  of  other  workers  eager  to  take  the 
place.  Consequently,  it  has  been  possible  for  the  job-owners  to 
make  harder  and  harder  terms  which  the  workers  may  take  or 
leave, — to  their  own  disadvantage  in  either  case. 

Until  1919  the  workers  were  able  to  defend  their  living  standards 
through  their  trade  unions.  With  the  rise  of  the  dictatorships, 
however,  first  in  the  Balkan  and  Baltic  states,  and  later  in  Italy, 
Austria  and  Germany,  trade  unions  were  destroyed  and  the  work- 
ers were  left  at  the  mercy  of  the  bosses,  except  in  so  far  as  res- 
trictions were  imposed  on  them  by  the  state.  Since  in  every 
country  of  West  Europe  the  bosses  are  in  substantial  control  of 
the  state  apparatus,  the  workers  are  left  literally  at  their  mercy. 
The  result  has  been  a wholesale  attack  on  working  and  living 
standards.  The  desperate  needs  of  the  unemployed  are  used  as 
the  weapon  with  which  longer  hours,  harder  tasks  and  lower  wages 
are  being  forced  on  those  who  still  have  jobs. 


Registered  Unemployed  (Feb.  1934) 


Austria 

Belgium 

Czechoslovakia 

Denmark 

France 

Germany 

Great  Britain 

Irish  Free  State 

Italy 

Netherlands 

Poland 

Sweden 


434,679 

178,556 

847,994 

126,766 

383,901 

3,372,611 

2,342,794 

98,642 

1,103,550 

358,023 

408,792 

101,794 


16 


EUROPE-WEST  AND  EAST 


The  process  is  described  in  Germany  by  the  graphic  phrase: 
belt-tightening.  At  the  end  of  1934  the  Nazis  had  so  far  succeeded 
in  their  economic  program  that  there  were  only  2,258,000  Germans 
officially  registered  as  unemployed.  At  the  same  time  their  policies 
had  destroyed  many  of  their  export  markets  and  had  raised  prices 
on  the  home  market.  The  millions  of  unemployed  and  the  other 
millions  whose  wages  have  been  cut,  and  whose  purchasing  power 
has  been  further  reduced  by  the  rise  in  prices,  are  to  get  through 
the  winter  by  belt-tightening. 

West  Europe,  in  a word,  has  adopted  the  slogan:  “No  one  shall 
starve.”  It  fits  the  European  scene  exactly.  Living  on  land  that 
is  potentially  very  rich;  supplied  with  vast  quantities  of  the  es- 
sential natural  resources;  equipped  with  the  most  advanced  modern 
manufacturing  and  transport  machinery;  manned  everywhere  by 
millions  of  highly  skilled  workers  and  technical  specialists,  West 
Europe  announces  this  slogan  for  the  winter  of  1934-5. 

With  its  given  equipment  of  resources,  tools  and  man  power, 
West  Europe  might  quite  easily  announce:  “Every  family  shall 

have  a fine  home  with  all  the  necessaries  and  comforts  of  life,” 
or  “A  university  education  for  every  boy  and  girl  in  West  Europe,” 
or  “Two  months  vacation  with  full  pay  on  the  Riviera  for  every 
worker  who  achieves  an  efficiency  of  90  percent.”  Any  one  or  all 
three  of  these  slogans  is  economically  possible  and  technically 
realizable.  If  the  resources  and  machine  equipment  of  West 
Europe  were  used  fully  by  the  present  man  power,  every  family 
could  enjoy  a standard  of  living  represented  in  the  United  States 
by  at  least  $60  per  week.  Instead  of  this  perspective,  West  Europe 
is  able  to  hold  out  to  its  industrial  masses  nothing  better  than 
the  beggarly  perspective:  “No  one  shall  starve.”  Capitalist  econo- 
my has  reached  a point  where  it  can  provide  subsistence  living — 
and  no  more. 

The  situation  in  East  Europe  differs  in  almost  every  respect 
from  that  in  West  Europe,  in  so  far  as  livelihood  is  concerned. 
The  small  scale,  hand-and-horse  farmer  is  being  replaced  by  co- 
operative, mechanized  large-scale  scientific  agriculture.  The  num- 
ber of  wage  workers  doubled  between  1929  and  1934.  There  are 
unemployables,  but  no  unemployed.  Children  in  school  receive  at 
least  one  hot  meal  per  day.  Workers,  in  their  work  places,  are 
provided  with  hot,  cooked  meals  at  very  low  prices.  In  East 
Europe  the  slogan:  “No  one  shall  starve”  would  be  laughed  to 
scorn.  Any  man  or  woman  in  the  Soviet  Union  who  is  willing 
and  able  to  work  is  bid  for  by  competing  enterprises.  If  work 
fails  in  one  place,  it  can  be  found  in  another.  And  those  who 
work,  and  their  children,  have  a good  living.  The  dread  of  unem- 
ployment and  the  spectre  of  want  that  haunt  the  lives  of  the  in- 
dustrial masses  of  West  Europe  do  not  exist  in  East  Europe.  The 


EUROPE— WEST  AND  EAST 


17 


powerful  trade  unions,  with  their  19  million  members,  are  charged 
with  the  duty  of  administering  social  insurance  and  of  maintaining 
safeguards  around  working  conditions.  The  general  economic 
plan  calls  for  an  increase  between  1933  and  1937  of  from  100  to 
200  percent  in  the  amount  of  consumption  goods  available  for  in- 
dustrial and  agricultural  workers.  Determined  campaigns  are 
waged  to  increase  the  quality  of  goods  supplied.  Soviet  workers 
are  now  getting  talking  machines,  radio  sets  and  bicycles.  They 
take  bread  for  granted.  Their  interests  are  centred  on  the  comforts 
and  refinements  of  life.  Unless  their  plans  miscarry,  they  will 
secure  during  the  coming  years  an  immense  advance  in  the  living 
standards  of  the  entire  population. 

While  the  working  masses  of  West  Europe  anxiously  ask  them- 
selves the  question:  “Must  we  starve?”,  in  East  Europe  the  work- 
ing masses  are  repeating:  “Greater  variety  in  the  food  supply; 

better  houses;  more  clothing;  a finer  life  for  us  and  for  our 
children.”  One  perspective  looks  down  to  the  point  where  there 
may  be  no  bread.  The  other  looks  up  to  the  freedom  of  an  abun- 
dant, assured  income  for  every  human  being  who  is  willing  to  do 
his  share  in  advancing  the  interests  of  the  group  to  which  he 
belongs. 


3.  Education  and  the  Refinements 

Steady  work  and  rising  wages  during  the  years  when  West 
European  economy  was  expanding,  promised  the  masses  a share 
in  education  and  in  the  enjoyment  of  literature,  the  theatre,  art, 
music  and  travel.  This  was  true,  successively,  in  England,  Ger- 
many, France,  Austria-Hungary  and  Italy.  The  immense  expan- 
sion of  national  incomes  and  the  technical  improvements  in  print- 
ing, the  talking  machine,  the  movies  and  the  radio  combined  to 
make  the  refinements  of  life  available  to  the  masses.  Trade  unions 
and  socialist  parties  promised  their  supporters  that  a few  more 
victories  in  the  picket  line  and  at  the  ballot  box  would  place  these 
advantages  firmly  within  their  grasp.  Today  this  dream  has 
vanished  from  the  West  European  social  scene  as  a fleecy  cloud 
vanishes  in  the  warmth  of  a blazing  summer  sun. 

The  economic  crisis  has  completed  what  the  War  of  1914  began. 
Funds  for  all  of  the  educational  services  have  been  reduced;  classes 
have  been  increased  in  size;  the  salaries  of  teachers  have  been  cut; 
and  worst  of  all,  the  chance  to  get  a higher  education  and  to  share 
in  the  refinements  of  life  has  been  drastically  limited  by  the  heavy 
cuts  in  the  wages  and  salaries  of  the  workers. 

German  workers  in  1913  enjoyed  a relatively  high  standard  of 
living  and  there  was  some  chance  for  the  children  of  working 
class  parents  to  get  a higher  education.  Today  a moderately  well- 


18 


EUROPE — WEST  AND  EAST 


paid  German  worker  receives  a wage  of  from  90  to  100  marks  a 
month,  out  of  which  he  must  pay  about  15  marks  for  social  in- 
surance, the  Labor  Front,  etc.  In  the  case  of  a family,  rent  takes 
another  15  marks,  leaving  from  60  to  70  marks  to  buy  food,  cloth- 
ing, and  the  necessaries  and  comforts  of  life.  60  to  70  marks  is  20 
to  25  dollars.  Clothing  costs  a little  less  in  Germany  than  it  costs 
in  the  United  States.  Vegetables  and  meat  are  cheaper.  Fruits, 
oils  and  fats  are  about  the  same  price.  Cereals,  sugar  and  coffee 
are  more  expensive  in  Germany  than  in  the  United  States.  Take 
the  figures,  work  out  a budget  and  see  how  much  is  left  over  for 
education  or  enjoyment.  And  remember  that  a university  student 
in  Germany  today  needs  about  60  to  70  marks  per  month  for 
tuition  fees  in  addition  to  his  food  and  clothing.  Bear  in  mind 
further  that  the  number  of  available  scholarships  has  been  reduced, 
while  the  money  cost  of  higher  education  has  been  increased. 

Is  it  any  wonder,  in  view  of  these  facts,  that  in  1933-4,  out  of 
21,427  new  students  entering  German  colleges  and  universities,  only 
about  3 in  each  hundred  were  the  children  of  workers?  The  figures 
show  that 

9,622  were  the  children  of  government  employes 
10,774  ” ” ” ” business  and  professional  men 

1,423  ” ” ” ” landowners 

809  ” ” ” ” workers 

Among  those  809,  38  were  the  children  of  land  workers,  and  the 
remainder  of  industrial  workers.  The  industrial  workers  are  the 
largest  single  occupational  group  in  Germany.  The  land  workers 
are  the  most  fiercely  exploited.  Workers  in  both  groups,  for  all 
practical  purposes,  cannot  hope  that  their  children  will  have  the 
advantage  of  a higher  education. 

Germany  is  typical,  not  exceptional.  The  subsistence  wages  on 
which  the  great  bulk  of  workers  in  West  Europe  are  today  living, 
limit  the  worker  and  his  family  to  the  bare  necessaries.  The  com- 
forts and  refinements  are  reserved  for  the  well-to-do. 

West  Europe  and  East  Europe  furnish  no  sharper  contrast  than 
that  between  the  educational  opportunities  enjoyed  by  the  working 
masses.  In  West  Europe,  a student  from  the  working  class  is  the 
exception  in  a higher  educational  institution.  In  East  Europe  he 
is  the  rule. 

While  appropriations  for  education  have  been  declining  in  West 
Europe,  they  have  been  rising  in  the  Soviet  Union.  The  pay  of 
teachers  has  been  increased.  School  facilities  have  been  improved. 
Particular  stress  has  been  laid  on  higher  education  for  workers 
and  their  children.  Workers  are  taken  from  the  factories  and 
shops  and  sent,  with  all  expenses  paid,  by  their  trade  unions,  to 
take  courses  in  higher  educational  institutions.  Children  who  finish 


EUROPE— WEST  AND  EAST 


19 


high  school  and  who  show  promise  are  given  scholarships  suf- 
ficient to  pay  all  their  expenses,  including  tuition,  board  and  minor 
expenses  in  higher  schools.  These  scholarships  are  graduated. 
The  student  who  does  high  class  work  receives  more  per  month. 
The  student  who  does  poor  work  loses  his  scholarship. 

Expanding  educational  opportunities  in  the  Soviet  Union  are 
recorded  in  the  figures  for  all  grades  of  education.  Take  elemen- 
tary schools  as  an  example.  In  1914-15  there  were  7.8  million  Rus- 
sian children  in  the  elementary  schools.  The  number  in  1927-28 
was  10.1  million;  in  1931-32,  20.9  million,  in  1933-34,  25  million. 
The  growth  in  the  number  of  high  school  students  is  even  more 
rapid.  But  the  most  startling  contrast  between  West  Europe  and 
East  Europe  is  met  with  in  the  higher  educational  institutions, — 
colleges  and  universities. 

Here  are  two  columns  of  figures — one  for  Germany,  the  other 
for  the  Soviet  Union. 


German  students 

Russian  students 

in  higher  scient- 

in higher  tech- 

ific schools 

nical  schools 

1928-9 

106,204 

166,824 

1929-30 

115,452 

191,055 

1930-1 

122,742 

272,125 

1931-2 

122,187 

390,970 

1932-3 

116,154 

500,000 

1933-4 

102,007 

— 

So  far  as  higher  education  is  concerned,  Germany  has  moved  back- 
ward. The  Soviet  Union,  by  contrast,  has  made  formidable  ad- 
vances. 

Not  only  in  formal  education,  but  in  many  other  directions,  are 
the  refinements  of  life  made  available  to  Soviet  workers:  music, 
art  and  the  theatre  are  within  the  reach  of  those  who  wish  to  make 
them  their  life-work,  or  to  enjoy  them.  A machinist  from  Paris 
sat  in  an  audience  of  Soviet  workers  in  the  Moscow  Opera  House. 
“I  have  lived  all  my  life  in  Paris,”  he  exclaimed.  “Never  have  I 
been  inside  the  Paris  Opera  House.  There,  opera  is  for  the 
rich.  Here  it  is  the  workers  who  enjoy  it.” 

Similarly  the  publishing  and  circulation  of  great  numbers  of 
relatively  cheap  books,  magazines  and  newspapers  brings  literature 
within  reach  of  the  Soviet  masses.  Vacations  with  pay  and 
relatively  cheap  travel  are  also  enabling  the  Soviet  masses  to  reach 
out  beyond  the  narrow  confines  of  the  old  village. 

The  refinements  of  life  in  West  Europe  are  for  the  ruling  classes 
and  their  immediate  adherents.  The  workers  are  lucky  if  they 


20 


EUROPE— WEST  AND  EAST 


get  bread.  In  East  Europe,  on  the  other  hand,  the  refinements  of 
life  are  within  reach  of  the  workers. 

4.  The  State 

The  states  of  West  Europe  are  shaking  themselves  free  from 
their  democratic  trappings.  For  a long  time  Marxians  have 
insisted  that  the  state  is  a mailed  fist  of  owning-class 
power  masquerading  in  a velvet  glove  of  civil  liberty 
and  democracy.  Today  civil  liberty  and  democracy  have 
been  thrown  aside  in  Italy,  the  Balkan  states,  Austria  and  Ger- 
many, leaving  the  masses  of  those  populations  in  sharp  contact 
with  the  mailed  fist.  Freedom  of  assemblage,  of  speech,  and  of 
the  press  have  disappeared.  With  them  have  gone  the  last  sem- 
blances of  right  of  trial  by  jury,  the  right  to  vote,  the  institutions 
of  representative  government.  Dictators,  speaking  in  the  name 
of  business  men  and  landlords,  sit  in  the  seats  of  power.  The 
masses  disobey  or  question  at  their  peril.  Clubs  and  guns  are 
ready  at  hand.  Police,  special  guards  and  soldiers  walk  the  streets 
and  patrol  the  trains.  The  state  has  become  omnipotent. 

Through  the  years  preceding  1914,  people  were  taught  to  believe 
in  the  possibilities  of  international  cooperation.  Even  as  lately 
as  1929  and  1930,  the  ex-socialist  Briand  talked  eloquently  of  a 
United  States  of  Europe,  and  the  advocates  of  a Pan  Europe  (ex- 
cluding the  Soviet  Union)  filled  the  press  and  the  mails  with  their 
propaganda.  That  clamor  has  been  silenced  today.  Pan  Europe 
is  as  dead  as  last  year’s  autumn  leaves.  No  man  talks  aloud  in 
favor  of  internationalism.  Such  words  constitute  treason  to  the 
new  totalitarian  state. 

Marxists,  pacifists,  internationalists, — all  are  rated  as  defeatists, 
saboteurs,  renegades  and  traitors.  The  press  of  Italy,  Austria, 
Hungary,  Germany  and  Poland  denounces  them  roundly  when  it 
deigns  to  mention  them  at  all. 

The  new  European  state  is  supreme  and  implacable,  that  is, 
sovereign.  People  who  wish  to  express  opinions  that  differ  in  any 
important  respect  from  those  of  the  ruling  class  do  not  publish  a 
paper  or  hire  a hall  or  even  write  a letter.  They  sit  in  restaurants 
with  their  backs  to  the  wall,  where  the  music  is  loud  enough  to 
drown  conversation,  or  else  they  walk  as  they  talk,  looking  care- 
fully about  them  for  eavesdroppers. 

As  we  travel  across  Europe,  in  each  train  soldiers  also  ride, 
with  rifles  slung  across  their  shoulders.  Special  agents,  in  party 
uniforms,  pace  up  and  down  the  aisles  of  the  cars,  eyeing  people 
carefully,  watching  and  listening.  Sometimes  a man  in  plain 
clothes  comes  into  a car,  shows  his  official  shield,  says:  “Pass- 
ports, please,”  and  then  goes  from  seat  to  seat  inspecting  docu- 
ments. Travellers  are,  in  the  very  nature  of  things,  suspicious 


EUROPE— WEST  AND  EAST 


21 


persons.  Only  those  who  stay  at  home,  under  the  watchful  eyes 
of  neighbors,  are  really  safe  citizens. 

As  the  train  approaches  the  frontier,  the  crowd  thins  out  until 
only  a few  business  men  and  tourists  are  left.  Few  citizens  ride 
across  the  boundary,  first  because  they  cannot  get  passports;  second, 
because  visas  cost  money;  and  third,  because  they  can  not  get 
work  outside  their  own  boundary  lines. 

We  are  at  the  frontier.  We  know  it  is  a frontier  because  armed 
men,  in  different  uniforms,  stand  on  opposite  sides  watching  one 
another.  The  train  stops.  Officials  enter,  examine  passports;  look 
through  baggage;  count  money;  examine  books;  confiscate  news- 
papers and  magazines  printed  across  the  border.  An  hour  passes. 
The  train  gets  under  way  again  and  begins  to  pick  up  passengers 
in  the  neighboring  sovereign  state. 

Such  is  sovereignty.  Such  is  the  dog  in  the  manger  that  is 
starving  itself  in  order  to  starve  its  neighbor.  Each  state  has  its 
own  ruling  class,  jealously  guarding  its  property  and  its  privileges 
against  the  workers  at  home  and  against  any  and  all  possible  rivals 
abroad.  Each  state  has  its  officials,  its  army,  its  police.  Each 
state  prints  money  and  postage  stamps,  passes  tariff  laws  and 
grants  subsidies  to  home  industry.  Each  state  is  fortified  and 
defended  against  every  enemy, — that  is,  against  every  neighbor. 

5.  War 

West  Europe  is  a battle  field  on  which  the  ruling  class  interests 
of  rival  states  are  engaged  in  a ferocious  competitive  struggle  for 
wealth  and  power.  The  struggle  centres  about  raw  materials  such 
as  Saar  coal,  Lorraine  iron  and  Persian  oil,  about  the  markets  of 
Jugoslavia,  North  Africa  and  Central  America.  This  bootless  and 
wasteful  competition  has  its  counterpart  in  military  preparations. 
The  ruling  class  that  proposes  to  win  and  hold  power  must  be 
prepared  to  fight  with  guns  as  well  as  with  economic  weapons. 

Armies  can  be  equipped  and  mobilized  in  a relatively  brief  space 
of  time.  Sea  power  rests  on  ships  that  require  years  for  their 
building  and  equipment.  Military  preparations  are  therefore  more 
in  evidence  on  the  sea  than  on  land,  and  competitive  navy  building 
programs  are  one  of  the  surest  signs  of  impending  military  con- 
flict. 

War  exhaustion  after  the  struggle  of  1914-18  drove  the  great 
rival  empires  to  restrict  navy  building  in  the  treaties  of  1922  and 
1930.  Great  Britain  reluctantly,  and  Japan  unwillingly,  accepted  in 
principle  a ratio  of  5:5:3  as  representing  the  relative  strength  of 
the  British,  United  States  and  Japanese  navies.  The  agreement 
expires  in  1935,  and  through  the  later  months  of  1934,  British, 
Japanese  and  American  statesmen  “conversed”  on  the  possibilities 


22 


EUROPE— WEST  AND  EAST 


for  the  future,  until  at  the  end  of  November,  the  Japanese  Ambas- 
sador to  the  United  States  publicly  announced  that  Japan  proposed 
to  abandon  the  1930  Treaty. 

Meanwhile,  however,  the  huge  navy  building  program  launched 
by  the  Roosevelt  administration  had  served  notice  on  West  Europe 
and  Japan  that  the  United  States  proposed  to  build  to  full  treaty 
strength.  The  British  Admiralty  had  twice  modified  its  plans  in 
favor  of  greater  sea  power.  France  and  Italy  had  entered  the  race; 
and  the  great  shipyards  in  Kiel,  Germany,  were  working  day  and 
night  on  navy  construction.  By  the  end  of  1934  the  suicidal  race 
for  naval  fighting  strength  was  in  full  cry. 

Military  preparations  do  not  stop  with  navies.  They  extend 
across  the  entire  horizon  of  mining,  manufacturing  and  transport. 
Smoke  is  pouring  from  the  stacks  of  the  chief  European  arms 
factories.  Day  and  night  they  are  at  work,  building  the  machines 
that  will  destroy  health,  life  and  property  during  the  coming  war. 

War,  in  1914,  was  still  fought  by  men  with  rifles,  bayonets  and 
hand  grenades.  The  only  important  machine  used  on  land  was  the 
cannon.  By  1918,  the  machine  gun,  the  air  bomber  and  the  tank 
had  come  into  their  own.  Today,  Europe’s  armies  are  mechanized, 
and  it  is  on  the  construction  of  these  war  machines  that  the  muni- 
tion factories  are  working  over-time. 

Here  is  an  estimate  of  the  extent  to  which  three  European  na- 
tions,— Britain,  France  and  Italy, — have  prepared  themselves  for 
mechanized  warfare. 


Mechanized  War  Equipment 


1914 

1934 

Cannon 

6,620 

8,000 

Machine  guns 

4,200 

46,550 

Airplanes 

500 

11,500 

Tanks 

— 

7,000 

These  tell  only  part  of  the  story.  Machine  guns,  airplanes  and 
tanks  have  increased  very  greatly  in  numbers.  They  have  increased 
still  more  in  size,  speed  and  destructiveness. 

Britain,  France  and  Italy  are  not  the  only  European  countries 
that  are  mechanizing  their  armies.  They  are  merely  the  countries 
for  which  figures  are  most  easily  available.  Poland  and  Czechoslo- 
vakia have  well-equipped  military  organizations.  Germany  is  re- 
arming at  break-neck  speed.  The  Soviet  Union  has  a thoroughly 
mechanized  military  force. 

Disarmament  is  a bad  joke  that  raises  a bitter,  cynical  laugh 
all  over  present-day  Europe.  The  League  of  Nations  Covenant 
drawn  up  in  1919  provided,  specifically,  for  disarmament.  After 


EUROPE— WEST  AND  EAST 


23 


thirteen  years  of  quibbling,  juggling,  dodging,  buck-passing  and 
lying,  the  League  called  the  Disarmament  Conference  together  on 
February  2,  1932.  More  than  two  years  later,  in  November,  1934, 
the  President  of  the  Conference  gave  it  as  his  opinion  that  general 
disarmament  was  not  then  practicable.  Only  one  nation,  the  Soviet 
Union,  had  stood  consistently  for  immediate  and  complete  disarma- 
ment. The  others  were  planning  and  preparing  for  war  during 
every  month  that  the  Disarmament  Conference  was  in  session. 

Some  issues  in  Europe  are  fairly  clear:  the  desire  of  the  im- 
perialists to  cripple  socialist  construction  in  the  Soviet  Union,  and 
the  determination  of  the  Soviet  workers  to  continue  at  all  costs; 
the  demands  of  Germany  for  a return  of  the  Polish  Corridor,  the 
Saar,  and  of  those  portions  of  Upper  Silesia  and  of  Schleswig- 
Holstein  that  were  cut  away  by  the  Treaty  of  1919;  the  desire  of 
France  to  hold  the  gains  of  the  1914-18  war;  the  British  fear  of 
French  military  and  political  power  on  the  continent;  the  rival 
claims  of  France  and  Italy  in  the  Balkans  and  in  North  Africa, 
beside  a multitude  of  minor  irritants.  But  there  is  no  general  line- 
up on  any  one  of  these  issues.  Suppose  Germany  should  seize 
Austria  or  the  Saar.  Who  would  fight  and  who  would  join  up 
with  whom? 

The  ruling  classes  in  1914  were  able  to  persuade  the  farmers,  the 
trade  unionists,  the  Socialist  Party  leaders  and  the  rank  and  file 
of  the  middle  class  that  they  were  fighting  for  the  defense  of  the 
fatherland,  for  freedom,  for  Belgium,  for  democracy.  Those  catch- 
words sold  easily  in  1914.  They  cannot  be  so  readily  sold  again. 
And  it  is  difficult  to  imagine  any  slogans  that  will  have  a relatively 
permanent  war-value. 

Outside  of  Great  Britain,  Belgium,  Holland,  and  to  a minor 
degree  in  France  and  the  Scandinavian  countries,  there  is  none  of 
the  1911-13  Socialist  propaganda  in  favor  of  a general  strike  against 
war.  From  the  very  nature  of  things  there  cannot  be:  first,  be- 
cause the  Socialist  Party  is  pretty  well  destroyed  all  over  Central 
Europe;  and  second,  because  the  belief  in  this  means  of  opposing 
war  has  quite  generally  disappeared. 

The  armies  would  march,  and  they  would  fight  for  a time  with 
great  enthusiasm  and  determination.  The  young  soldiers  in  the 
ranks  would  welcome  such  a release  from  hum-drum  routine,  as 
they  would  welcome  any  other  holiday.  But  when  the  first  glamour 
of  the  campaign  had  worn  off  and  the  revolutionaries  in  the  ranks 
had  had  time  to  get  in  their  work,  a new  situation  would  speedily 
arise.  The  masses,  once  more  mobilized  and  armed  as  they  were 
in  1914,  with  the  revolutionary  traditions  of  1917,  1918,  1919  and 
1934  behind  them,  would  find  their  common  cause  and  their  com- 
mon front  against  the  disintegrating,  decaying  social  system  that 


24 


EUROPE— WEST  AND  EAST 


had  hurled  them  into  the  senseless  slaughter.  Revolutionary  com- 
mittees in  the  armies  would  establish  their  contacts  with  like  com- 
mittees in  the  factories  and  shops  behind  the  lines,  and  across  the 
lines.  There  would  be  a central  committee  of  workers,  farmers 
and  soldiers  representing  a West  European  revolutionary  block, 
and  the  bootless  war  for  privilege  and  power  would  be  at  an  end. 

The  workers  of  all  Europe  feel  this.  The  statesmen  know  it. 
And  that  knowledge  is  one  of  the  chief  factors  in  holding  the  dogs 
of  war  in  leash. 

6.  Fascism  and  Revolution 
a.  Italy’s  XHIth  year 

Dates  are  written  now  in  Italy  in  the  following  way:  December 
1,  1934  Year  XIII.  The  XIII  marks  the  passage  of  time  since  the 
fascists  seized  power. 

The  thirteen  years  of  fascist  rule  were  preceded  by  three  years 
of  active  campaigning,  during  which  Mussolini  and  his  followers 
promised  the  workers,  farmers,  professional  and  propertied  classes 
of  Italy  a new  heaven  and  a new  earth.  Italy  today  is  a disciplined, 
orderly  country,  swarming  with  men,  women,  boys  and  girls  in 
uniform,  all  of  whom  seem  to  know  what  to  do,  and  to  be  going 
about  their  business.  Their  business  is  the  establishment,  with  the 
active  aid  and  support  of  the  Catholic  Church,  of  a Christian  Cor- 
porate State, — that  is,  one  in  which  all  mature  persons  belong  in 
a certain  occupational  group  or  category,  where  they  carry  on 
their  share  of  the  work  assigned  to  that  particular  group,  always 
under  the  watchful  eyes  of  the  elite, — the  members  of  the  Fascist 
Party. 

The  Christian  Corporate  State  has  replaced  the  system  of 
democratic  institutions  that  was  spread  across  Italy  when  it  came 
to  power.  Representative  government  has  disappeared.  Every 
avenue  of  public  expression, — radio,  movies,  newspapers,  magazines, 
books,  schools, — speak,  print  and  teach  under  a censorship  of  the 
most  absolute  character.  Officially,  Italy  speaks  with  but  one 
voice, — that  of  the  Fascist  Party. 

The  Fascists  have  sponsored  a number  of  important  public 
works:  electrification  of  railways;  road-building;  hydro-electric 
construction,  land  reclamation,  including  the  very  extensive  work 
of  draining  the  Pontine  marshes;  the  organization,  with  the  aid  of 
heavy  subsidy,  of  a merchant  marine;  the  construction  of  schools, 
hospitals  and  other  public  buildings.  All  of  this  construction  is 
directly  connected  with  the  state  power. 

The  Fascist  government  has  attempted  the  regulation  of  econo- 
mic life:  subsidies  for  agriculture  and  craft  industry;  the  control 
of  wages,  hours  of  labor,  prices;  of  new  capital  construction;  of 


EUROPE— WEST  AND  EAST 


25 


banking  and  credit,  of  export  and  import.  The  propertied  and 
privileged  in  Fascist  Italy  must  use  their  property  and  exercise 
their  privilege  in  conformity  with  the  rules  laid  down  by  the 
Fascist  Party. 

Beneath  the  institutional  network  that  fascism  has  so  successful- 
ly spread  over  Italy,  the  ordinary  business  of  life  is  being  trans- 
acted much  as  it  was  before  the  March  on  Rome.  The  propertied 
and  privileged  still  live  comfortable  or  luxurious  lives,  and  the 
working  masses  still  exist  under  atrocious  conditions.  The  poverty 
of  the  lower-paid  workers  in  the  cities  is,  if  possible,  exceeded  by 
the  poverty  of  the  workers  on  the  land.  City  housing  for  the 
poor  is  as  bad  as  anything  to  be  found  in  West  Europe.  And  on 
the  wages  paid  to  unskilled  labor,  about  10  lire  a day,  life  on 
anything  above  the  barest  subsistence  level  is  impossible.  It  goes 
without  saying  that  the  Italian  masses  are  far  removed  from  the 
refinements  of  life. 

Italian  economy  under  fascism  has  passed  through  the  world 
economic  crisis  in  very  much  the  same  way  as  the  other  major 
economies  of  West  Europe.  Industrial  production  reached  a low 
point  of  62  in  1932,  compared  with  100  for  1928.  In  1934  the  figure 
was  86.  The  money  value  of  exports, — 1929  being  100, — was  80  in 
1930;  45  in  1932  and  39  in  1933.  During  the  crisis  years  in  Italy, 
as  in  other  capitalist  countries,  business  failures,  the  volume  of 
unemployment,  and  wage  rates  have  kept  pace  with  the  general 


movement 

of  profit  economy. 

Business  Failures 
Average  per  month 

Unemployed 
on  March  31 
(in  thousands) 

Wage  Rates 
in  March 

1929 

1,010 

293 

100 

1930 

1,134 

385 

— 

1931 

1,483 

707 

90 

1932 

1,684 

1,053 

85 

1933 

1,431 

1,082 

83 

1934 

— 

1,057 

83 

The  figures  for  unemployment  include  only  the  number  of  regis- 
tered unemployed.  The  wage  figures  are  for  wage  rates — not  the 
total  of  wages  paid.  They  must  also  be  balanced  against  a falling 
price  level  that  makes  the  purchasing  power  of  wages  6%  greater 
in  March  1934  than  it  was  in  March  1929.  Italy,  like  other  coun- 
tries of  West  Europe  during  the  crisis  years  has  carried  a heavy 
budget  deficit.  Consequently  the  public  debt  has  steadily  risen 
from  89  billion  lire  in  1930  to  97  billion  in  1932  and  103  billion  in 
1934.  It  is  therefore  evident  that  the  changes  which  the  fascists 
have  made  in  the  political  structure  have  not  altered  essential 


26 


EUROPE— WEST  AND  EAST 


economic  relations.  Italy  was,  and  Italy  remains,  a capitalist 
country  subject  to  the  laws  which  govern  all  capitalist  countries 
in  the  general  crisis  of  capitalism. 

b.  Hitler’s  Germany 

The  Social  Democrats  were  better  entrenched  in  Germany  than 
anywhere  else  in  the  world.  They  had  the  trade  unions  almost 
solidly  behind  them.  They  had  a well-organized  cooperative  move- 
ment. They  had  an  enormous  sport  organization.  They  had  a 
splendid  press,  with  dailies,  weeklies,  monthlies,  leaflets,  pamphlets 
and  books  by  the  tens  of  millions.  The  Social  Democratic  Party 
had  a dues-paying  membership  of  more  than  a million.  In  every 
important  election  from  1918  until  1931  they  polled  more  votes  than 
any  other  party  in  Germany. 

Politically,  the  Social  Democrats  were  the  strongest  single  force 
in  Germany.  They  could  have  had  anything  they  wanted  in  1918 
and  1919.  They  made  plain  by  their  actions  what  that  was.  They 
wanted  to  crush  the  revolutionary  movement,  and  they  did  it,  mur- 
dering Karl  Liebknecht  and  Rosa  Luxemburg,  and  smashing  the 
Bavarian  Soviets  along  the  way.  They  wanted  certain  minor  re- 
forms, and  they  got  them, — more  school  facilities,  better  housing, 
more  adequate  sanitation.  They  said  that  they  wanted  to  achieve 
socialism  by  gradual,  legal,  democratic  means;  and  on  that  point 
their  program  fell  flat,  and  with  it  fell  the  whole  structure  of  minor 
reforms  for  which  they  had  fought  since  1875. 

While  the  Social  Democrats  were  busy  with  minor  reforms, 
propaganda,  demonstrations,  and  appeals  to  their  constituency  to 
“avoid  provocation,  and  cast  their  vote  on  July  31,”  the  Nazis 
were  organizing  and  drilling  an  army.  The  showdown  came  in 
1932  and  1933.  Hitler,  with  his  500,000  organized,  drilled  brown 
shirts  took  over  the  government  of  Germany  as  one  picks  a ripe 
apple  from  a tree.  He  then  turned  his  attention  to  the  Social 
Democrats.  Overnight  the  Party  was  outlawed,  its  press  ex- 
propriated, its  funds  confiscated  and  its  leaders  in  flight  or  in  jail. 
The  program  of  gradual,  legal,  democratic  advance  toward  social- 
ism hung  like  a piece  of  tattered  paper  caught  up  by  the  wind  and 
tossed  onto  the  roadside  hedge. 

The  trade  unions  offered  greater  difficulties.  Hitler  waited  till 
May.  Then,  as  a fitting  celebration  of  May  Day,  he  transfered  the 
trade  unions  bodily  into  his  own  Labor  Front. 

Within  six  months  of  the  day  he  took  power,  Hitler  had  des- 
troyed every  vestige  of  the  German  working  class  movement, — 
every  trade  union;  every  cooperative;  every  political  party;  every 
social  organization,  every  publication.  To  be  sure,  an  under- 
ground movement  remained,  but  the  apparatus  that  was  to  introduce 


EUROPE— WEST  AND  EAST 


27 


socialism  by  gradual,  legal  and  democratic  means  had  been  ob- 
literated. In  its  place  was  the  Supreme  Nazi  State,  ruling  over 
a German  people  divided  into  six  ‘‘Estates”:  (1)  industry;  (2) 
trade;  (3)  the  labor  front;  (4)  the  farmers;  (5)  the  hand  crafts,  and 
(6)  culture. 

The  policy  of  encouraging  farming  and  craft  industry  (village 
economy)  is  an  important  aspect  of  the  Nazi  program.  It  is  far 
less  significant,  however,  than  the  developments  in  the  field  of  in- 
dustry and  trade.  On  Oct.  24,  .1934  Hitler  promulgated  the  basic 
law  of  Labor  Front,  under  which  the  class  struggle  is  abolished, 
and  bosses  and  workers  are  united  in  one  organization. 

Each  mine,  factory,  garage,  office  or  shop  in  which  workers  are 
employed  constitutes  a Labor  Front  unit.  The  owner  or  director 
of  the  workplace  is  the  “leader”  of  the  unit.  Legally  someone 
besides  the  owner  may  be  leader.  In  practice  the  boss  is  usually 
named.  Workers  must  accept  his  leadership  just  as  they  accept  it 
in  the  processes  of  production — because  he  either  owns  the  job 
or  else  represents  the  job  owner. 

Workers  in  each  unit  elect  a shop  committee.  But  this  com- 
mittee does  not  exercise  the  real  power.  Instead,  a small  com- 
mittee of  Nazi  Party  members  exercises  the  real  control  through 
a Nazi  cell,  comprising  all  party  members  employed  in  the  work- 
place. In  larger  workplaces,  the  Nazi  Party  also  has  an  official 
party  representative  responsible  to  it  for  the  conduct  of  affairs  in 
that  shop. 

All  workplaces  in  a given  territory  are  united  in  a Labor  Front 
local.  But  these  locals  are  not  organizations  of  the  workers.  They 
make  up  a Labor  Front  apparatus.  Beyond  the  workplace,  neither 
the  workers  nor  their  direct  representatives  meet.  Each  group  of 
workers  is  isolated  from  every  other  group.  Only  the  responsible 
Nazi  Party  workers,  in  fact,  come  together  even  in  the  Labor 
Front  locals.  The  district  and  regional  organizations  consist  even 
more  exclusively  of  party  organization  workers.  The  leaders  of 
the  entire  Labor  Front  are  appointed  from  the  Nazi  Party.  The 
whole  apparatus  is  designed  to  isolate  the  workers  in  small  groups. 
It  will  thus  be  difficult  for  them  to  establish  contacts  or  to  develop 
any  sense  of  working  class  solidarity  beyond  the  boundaries  of  the 
individual  workplace. 

The  bosses,  by  contrast,  are  very  handsomely  cared  for.  In 
theory,  their  organizations  were  liquidated  at  the  same  time  that 
the  trade  unions  were  smashed,  and  both  forms  of  organization 
were  replaced  by  the  Labor  Front.  In  practice  there  are  three 
“fronts”  in  the  German  business  world:  the  Labor  Front,  to  which 
workers  and  bosses  belong;  the  Industry  Front,  to  which  only 
bosses  belong;  and  the  Trade  Front,  to  which  only  bosses  belong. 


28 


EUROPE— WEST  AND  EAST 


Manufacturers’  associations  and  chambers  of  commerce  have  been 
continued  under  the  names  of  Industry  Front  and  Trade  Front, 
while  the  workers’  organizations  have  been  completely  destroyed 
or  driven  underground. 

The  Nazis  have  recently  published  three  sets  of  figures  which 
speak  volumes: 


t 


German  Economy 

Year  National  Income 

1929  76.1 

1930  70.2 

1931  57.1 

1932  46.5 

1933  47.5 

1934  — 


(millions  of  marks) 

Expenses  of  Expenses  for 

Central  Govn.  Army  and  Navy 


— 

691 

8.8 

681 

7.4 

617 

6.3 

634 

5.9 

672 

6.4 

894 

The  national  income  has  fallen,  materially.  The  budget  of  govern- 
ment expenses  has  declined  in  proportion.  But  the  cost  of  military 
preparations  is  rising.  Nazi  Germany  is  moving  toward  war. 


c.  The  October  uprising  in  Spain 


The  Socialists  were  the  best  organized  and  most  effective  political 
group  in  Spain  when  the  monarchy  was  overthrown  in  1931.  Not 
only  was  their  political  organization  effective,  but  their  roots  were 
planted  solidly  in  the  General  Federation  of  Labor.  They  were 
therefore  able  to  dominate  the  government  of  the  new  republic 
just  as  the  Social  Democrats  dominated  the  new  German  Republic 
in  1919.  The  monarchist,  clerical  and  business  elements  were  well- 
represented  in  the  Parliament,  however,  and  were  able  to  thwart 
any  effective  attack  on  the  church,  landed  property  or  private  busi- 
ness. 

While  the  Parliament  was  debating  and  passing  such  reform 
legislation  as  the  Socialists  were  able  to  force  through,  the  conser- 
vatives were  mobilising.  In  1933  they  had  gained  sufficient  strength 
to  win  a sweeping  victory  in  the  general  election  and  thus  to 
drive  the  Socialists  from  power. 

This  victory  of  the  conservatives  divided  the  Socialist  Party  into 
a right  wing  in  favor  of  continuing  the  legal,  parliamentary  strug- 
gle for  a socialist  Spain,  and  a left-wing  that  favored  a seizure  of 
power  before  the  propertied  and  privileged  victors  in  the  1933  elec- 
tions had  time  to  consolidate  their  position.  It  was  this  group 
that  initiated  the  October  uprising. 

Supplies  of  arms  and  ammunition  were  smuggled  into  Spain  and 
distributed  to  the  various  centres.  In  the  province  of  Asturias  the 


EUROPE — WEST  AND  EAST 


29 


workers  were  drilled  in  preparation  for  the  struggle.  Elsewhere 
they  seem  to  have  been  quite  untrained,  either  in  the  use  of  fire- 
arms or  in  the  methods  of  modern  street  fighting. 

Representatives  of  all  working  class  groups  were  brought 
together  in  a Workers  Alliance.  But  the  Alliance  was  new  (organ- 
ized only  a few  months  before  the  revolution)  and  nowhere  did  it 
function  effectively.  It  lacked  authority.  It  had  not  been  able  to 
draw  up  general  plans.  In  no  sense  was  the  Alliance  a general 
staff,  equipped  to  direct  the  revolutionary  action  of  October. 

Numerically  the  Socialists  were  by  far  the  largest  group  in  the 
Workers  Alliance.  The  Communists  insisted  that  no  action  should 
be  taken  until  the  Alliance  had  been  broadened  into  a Workers, 
Farmers  and  Soldiers  Alliance,  or,  at  the  very  least,  into  a Work- 
ers and  Farmers  Alliance.  They  were  over-ruled,  however,  and 
the  action  was  set  for  October. 

The  action  was  begun  by  a general  strike  on  October  4th.  In 
the  industrial  regions  of  North  Spain,  and  in  the  cities  of  the  North 
and  East,  this  strike  was  very  complete.  In  the  cities  of  the  South, 
it  was  quite  ineffective.  In  the  rural  districts,  where  the  farm 
workers  were  very  militant  and  had  fought  bitter  strikes  in  1933 
and  in  the  early  summer  of  1934,  it  was  completely  ineffective. 
There  was  no  movement  in  the  armed  forces. 

From  the  declaration  of  the  strike  until  the  uprising  was  finally 
crushed,  there  was  no  central  leadership  or  direction.  Each  city 
and  district  fought  the  issue  out  for  itself. 

The  movement  in  Barcelona  and  Catalonia  had  been  placed  in 
the  hands  of  the  Catalonian  Nationalists  (Separatists).  It  was  a 
bourgeois  group,  without  working  class  organizational  connections. 
This  group,  because  of  its  official  position  was  able  to  seize  power 
without  any  great  difficulty,  since  it  was  in  control  of  the  armed 
forces  and  of  the  political  machinery  of  the  state.  But  lacking 
mass  support  it  collapsed  within  a few  hours. 

The  fighting  in  Madrid  was  determined  and  lasted  through 
several  days.  The  workers  attacked  the  central  telephone  ex- 
change and  other  public  buildings,  but  at  no  time  did  they  gain 
control  of  any  important  strategic  centre.  In  the  street  fighting 
they  were  easily  out-manoeuvered  and  out-fought  by  the  armed 
forces. 

Only  in  the  Basque  country  and  in  the  Province  of  Asturias,  that 
is,  in  the  mountainous  region  along  the  northern  border  of  Spain, 
did  the  movement  reach  serious  proportions.  In  the  Basque  coun- 
try the  uprising  was  still  largely  separatist,  though  the  workers 
took  part  in  it.  In  Asturias,  where  it  was  a thoroughgoing  work- 
ing class  movement,  the  workers  marched  on  Oviedo,  the  capital 
of  the  province,  established  the  U.H.P.  (Union  de  Hermanos 


30 


EUROPE-WEST  AND  EAST 


Proletaries)  and  maintained  themselves  for  a fortnight  against  the 
armed  forces  of  Spain. 

A word  about  those  armed  forces.  The  Spanish  army  is  about 

100.000  strong.  It  is  a typical  conscript  army  of  young  fellows 
drawn  from  all  walks  of  life.  The  ruling  class  does  not  rely  on 
it  and  does  not  use  it  in  any  emergency.  The  army  attack  on  the 
U.H.P.  was  led  by  a regiment  of  Moors  and  the  Foreign  Legion, 
both  brought  from  Africa  for  the  purpose,  and  both  composed 
of  professional  fighters.  The  Civil  Guard,  about  50,000  strong,  a 
professional  fighting  force  composed  of  the  sons  of  civil  guards 
and  of  army  veterans,  is  quartered  all  over  Spain,  in  the  rural  as 
well  as  in  the  industrial  sections.  It  is  a long  established  insli:u- 
tion  with  strong  traditions  and  excellent  morale.  Its  members 
always  carry  rifles.  The  Assault  Guard,  about  30,000  strong,  is  a 
recently  organized  force,  called  together,  in  the  first  instance,  to 
break  up  demonstrations  of  workers.  Armed  in  the  beginning  only 
with  clubs,  its  members  now  carry  rifles.  The  Security  Guard, 
numbers  unknown  to  the  writer,  is  a force  like  the  Assault  Guard, 
armed  with  rifles,  and  like  the  Civil  Guard  and  the  Assault  Guard, 
widely  scattered  through  the  country.  There  are,  in  addition,  about 

10.000  well-armed  Customs  guards,  and  a city  police  force  of  some 
25,000.  The  ruling  class  does  not  rely  upon  the  police  force,  and 
during  the  October  uprising,  in  one  city  at  least,  they  were  dis- 
armed by  official  orders. 

The  Spanish  ruling  class  has  four  organized  armed  forces,  in 
addition  to  the  army  and  the  city  police.  The  Civil  Guard,  the 
Assault  Guard,  the  Security  Guard  and  the  Customs  Guard  all  are 
professional  soldiers.  Each  is  independently  organized.  During 
the  October  uprising  all  were  mobilized  under  the  Ministry  of 
War.  The  railway  workers  were  likewise  mobilized,  and  a few 
of  them  were  armed  and  directed  to  protect  railway  property. 

The  U.H.P.,  with  perhaps  30,000  or  40,000  men,  untrained,  and 
equipped  for  the  most  part  only  with  small  arms,  was  thus  face  to 
face  with  a government  that  had  at  its  disposal  an  army  of  100,000, 
and  professional  fighting  forces  of  at  least  another  100,000.  Under 
these  circumstances,  nothing  but  the  effective  organization,  the 
untiring  devotion  and  the  heroic  spirit  of  the  workers  kept  the 
U.H.P.  alive  for  two  weeks. 

The  workers  of  Asturias  had  planned  the  movement  in  great 
detail.  The  chief  of  their  Provincial  Council  was  a socialist.  The 
Mayor  of  Oviedo  was  a revolutionist  with  a large  working-class 
following.  The  mining  villages  were,  of  course,  completely  in  the 
hands  of  the  workers,  save  for  small  detachments  of  Civil  Guards. 
At  the  outset,  no  sectarian  questions  were  raised.  The  movement 
was  a united  front  movement  of  class-conseious  workers  intent 


EUROPE— WEST  AND  EAST 


31 


upon  overthrowing  and  destroying  the  system  of  exploitation.  The 
name  Union  of  Proletarian  Brothers  indicated  that.  The  Asturian 
miners  who  made  up  the  majority  of  the  workers  formed  their 
ranks  according  to  plan,  and  marched  upon  the  three  chief  cities 
of  the  Province:  Oviedo,  the  capital,  and  Gijon  and  Aviles,  the 
two  principal  ports.  All  three  cities  were  captured  by  the  workers. 
They  were  driven  out  of  Gijon  by  a bombardament  from  the  war- 
ships on  the  harbor,  and  by  a land  attack  led  by  African  troops. 
They  held  Aviles  for  a week,  and  lost  it  as  a result  of  a surprise 
attack  from  the  land.  They  surrendered  Oviedo  only  after  a great 
section  of  the  city  had  been  destroyed  by  artillery  fire  and  by  re- 
peated bombings  from  the  air.  Then  only  did  the  remnants  of  the 
Red  Army  take  to  the  mountains,  where  they  continued  their 
resistance  for  several  weeks. 

The  U.H.P.  while  it  lasted  was  a well-organized  workers  state. 
It  had  a system  of  supply,  of  communication,  of  health.  It  had  a 
political  system,  including  a Red  Army.  Discipline  was  excellent, 
and  in  view  of  the  civil  war  that  was  in  progress  during  the  entire 
period  of  its  existence,  the  U.H.P.  succeeded  in  maintaining  good 
order  in  the  territory  under  its  control.  Not  since  the  Soviets  were 
established  in  Bavaria  and  Hungary,  fifteen  years  earlier,  had 
there  been  such  an  effective  and  complete  working  class  control 
in  any  part  of  West  Europe. 

The  Asturias  Workers  State  has  been  overthrown  and  the 
authority  of  the  Spanish  ruling  class  has  been  reestablished.  A 
representative  of  the  Madrid  government  has  been  sent  to  the 
provincial  capital.  Thousands  of  workers  were  killed  in  the  fight- 
ing or  captured  and  shot  wholesale  by  the  military.  The  Spanish 
prisons  are  so  over-crowded  that  batches  of  prisoners  have  been 
temporarily  transferred  to  ships.  Technically,  the  October  uprising 
is  crushed.  But  ideologically  its  spirit  has  aroused  the  imagination 
and  kindled  the  zeal  of  workers  in  all  parts  of  Spain.  “We  had  no 
idea  it  was  so  easy,”  says  one.  Another  nods.  “If  one  other 
province  had  put  up  an  equally  sturdy  fight,  the  Union  de  Her- 
manos  Proletaries  would  now  control  Spain.”  “Better  organization 
next  time,”  says  a third.  “We  must  prepare  well  in  advance,  and 
move  together,  under  a united  leadership.”  “Yes,  it  is  coming,” 
another  agrees.  “And  this  time  we  must  all  be  ready  to  go  at  the 
same  time.” 


7.  Sovietism 

a.  After  two  years 

Two  years  have  passed  since  I last  crossed  the  Soviet  frontier. 
Then  the  country  was  in  the  midst  of  a stupendous  program  of 
construction  and  of  collectivization.  Meanwhile  I had  read  much 


32 


EUROPE— WEST  AND  EAST 


about  the  success  of  this  campaign.  I therefore  expected  to  see 
many  changes.  Still  I was  amazed  at  what  I found. 

The  countryside  has  been  transformed.  Small-scale  strip  farming 
has  given  place  almost  entirely  to  large  scale  collective  farming. 
On  all  sides  stretch  the  big  fields.  Millions  of  acres  have  been 
seeded  to  winter  grain.  Other  millions  are  ploughed,  ready  for  the 
spring  sowing.  Herds  of  horses,  cattle,  sheep  and  pigs  and 
flocks  of  ducks  and  geese  are  scattered  here  and  there.  Some  of 
them  very  large,  several  score  or  even  several  hundred  in  a herd. 
In  one  collective  village  after  another  new  buildings  are  going  up, 
houses,  barns,  warehouses,  elevators,  schools,  nurseries,  clubs.  The 
village  of  Tsarist  Russia,  with  its  big  church  and  its  collection  of 
squalid  huts  and  yards  is  being  replaced  by  the  agricultural  com- 
munes, stocked  and  equipped  for  large-scale  farming. 

At  the  stations  throughout  the  farming  sections,  new  warehouses 
and  elevators  have  been  constructed.  I am  lucky  enough  to  make 
a long  trip  at  harvest  time  and  to  see  the  small  mountains  of 
wheat,  potatoes,  cabbage  and  sugar  beets  that  have  overflowed  the 
warehouses,  and  that  must  lie  out,  under  canvas,  until  they  are 
loaded  on  freight  cars. 

I am  also  lucky  enough  to  be  in  a section  that  is  sadly  behind 
in  its  harvest  work, — 25  percent  completed  at  the  end  of  September 
— and  to  see  a mobilization  on  the  agricultural  front.  Hand  bills 
are  scattered.  Word  is  passed  from  mouth  to  mouth.  Special 
trains  are  run.  Every  available  person  is  drafted  to  get  the  crops 
under  cover.  Thousands  respond.  Almost  over  night  the  potatoes 
are  out  of  the  partly  frozen  ground;  the  cabbage  is  cut  and  stored; 
the  oats  are  collected  and  stacked;  the  carrots  and  beets  are  buried 
in  winter  store-bins.  No  one  here  settles  back  with  the  smug  as- 
surance: “Every  man  for  himself!  I have  my  crop  in.”  Here  it  is: 
“All  hands  together  in  the  common  tasks!” 

The  cities  have  changed  even  more  than  the  countryside.  There 
are  new  factories  and  office  buildings,  apartments,  hotels,  schools 
and  clubs,  and  countless  new  houses.  The  streets  are  paved.  More 
busses  and  street-cars  are  running.  People  are  better  clothed  and 
far  better  shod.  But  the  most  important  change  of  all  is  in  the 
shops. 

“Mass  production”  is  the  slogan  of  the  Second  Five  Year  Plan: 
kitchenware,  furniture,  radios,  bicycles,  passenger  automobiles.  By 
1937,  so  the  Plan  reads,  the  volume  of  goods  available  to  the  Soviet 
workers  should  be  at  least  two  to  three  times  as  great  as  the 
volume  in  1933.  That  Plan  is  now  bringing  results.  Two  years 
ago  the  stores,  even  in  the  principal  cities,  were  empty  pretences. 
Today  they  approach*  and  some  of  them  even  surpass,  the  shops  of 
West  Europe. 


EUROPE— WEST  AND  EAST 


33 


The  department  stores  are  piled  high  with  clothing,  textiles, 
electric  fixtures,  radio  equipment,  kitchenware,  toys  and  notions. 
They  still  lack  sufficient  quantities  of  such  things  as  paint,  wall- 
paper, tools  and  general  hardware,  furniture  and  shoes.  But  the 
demand  is  terrific;  all  day  long  streams  of  buyers  throng  their 
aisles  and  jam  their  counters. 

A new  food  store  has  been  opened  in  Moscow  on  Gorki  Street, 
near  the  Moscow  Soviet.  It  covers  a huge  space.  At  one  end 
of  the  shop  are  vegetables  piled  high  in  enormous  variety.  Then 
comes  a display  of  fruit  that  I have  never  seen  excelled.  Beyond 
is  a department  devoted  to  canned  goods,  smoked  and  dressed 
meats,  butter  and  cheeses.  Finally  there  is  a bake  shop  with  an 
exceptionally  elaborate  display  of  every  kind  of  bread  and  rolls. 
All  in  all,  there  is  not  a finer  looking  food  store  anywhere  in 
Europe,  and  it  is  filled  to  the  doors  with  workers  who  have  plenty 
of  money  to  spend.  In  West  Europe,  workers  visit  such  stores 
only  to  buy  for  their  masters.  Here  they  come  to  buy  for  them- 
selves. 

Coffee  shops  and  cafes  are  being  opened.  They  are  well-kept 
and  tastefully  fitted  out  and  decorated,  furnished  in  modernistic 
style.  People  go  to  these  shops  to  enjoy  themselves,  to  rest,  to 
chat  and  to  visit.  Many  of  these  cafes  are  in  the  workers  clubs. 
Others  are  on  the  principal  streets. 

They  are  planting  shrubs  and  trees  in  every  city.  On  all  sides 
are  grass  plots  and  flower  beds — in  the  yards  of  factories  as  well 
as  in  the  open  spaces.  Many  of  these  attempts  at  decoration  and 
beautification  are  crude.  Others  are  masterful.  All  are  sincere. 
The  people  want  lovely  things.  One  peasant  woman  wrote  to 
Stalin,  protesting  against  the  ugly  textiles  that  had  been  sent  to 
her  village.  Instead  of  these,  she  wrote,  “We  want  colors  that 
will  bring  joy  to  the  heart.” 

The  note  of  hesitancy  and  question  that  one  still  heard  during 
the  first  Five  Year  Plan  is  gone.  In  its  place  there  is  a tone  of 
sturdy,  almost  boastful  confidence.  “We  have  done  it  once,  and 
we  can  do  it  again  and  again!”  They  have  heard  that  the  capitalist 
world  is  rotting  and  dying.  They  feel  the  strong  life  currents 
throbbing  through  their  own  new  social  order.  All  about  them 
they  see  a new  world  rising.  They  are  a part  of  that  new  world. 
They  are  building  it.  They  speak  of  it  with  a proud  smile  as  “Our 
World.” 

The  Soviet  Union  is  no  happy  paradise,  with  the  problems  of  life 
solved,  and  strawberries  and  cream  for  dessert  every  day.  It  is 
a social  workshop  where  the  patterns  for  a new  society  are  being 
designed  and  built,  often  in  the  face  of  obstacles  that  seem  in- 
superable. Despite  these  obstacles,  in  two  brief,  crowded  years 


34 


EUROPE— WEST  AND  EAST 


the  Soviet  workers  have  achieved  wonders  in  the  way  of  physical 
improvements.  Furthermore,  they  have  set  themselves  a pace, 
which  if  kept  to,  will  carry  them  far  indeed  before  the  Third  Five 
Year  Plan  is  inaugurated  in  1938. 

b.  A Soviet  giant 

Soviet  workers  are  fond  of  using  the  term  “giant”  to  describe  the 
largest  of  their  enterprises.  They  named  one  collective  farm  “The 
Giant.”  They  speak  of  the  giant  auto  works  at  Gorki;  of  the  giant 
power  station  on  the  Dnieper.  Among  these  giants,  one  of  the 
most  important  and  impressive  is  the  steel  mill  at  Magnitogorsk. 

Magnitogorsk  (Iron  Mountain)  is  a hill  in  the  Ural  mountain 
chain  which  consists  almost  entirely  of  iron  ore.  Engineers  estimate 
that  it  will  yield  10,000  tons  of  ore  per  day  for  about  100  years. 
The  Magnitogorsk  iron  deposit  has  been  known  for  a long  time. 
In  Tsarist  days,  horses  carried  the  ore  50  or  60  miles  to  the  nearest 
woodland,  where  it  was  smelted  with  charcoal.  No  serious  attempt 
was  ever  made  to  develop  the  ore  deposit,  however,  until  1929. 

Within  five  years,  Magnitogorsk  has  been  transformed  from  a 
barren  steppe  into  a construction  camp  housing  300,000  people, 
with  a modern  steel  mill  operating  24  hours  a day.  Another  five 
years,  and  there  will  be  a new  and  modern  socialist  city  extending 
along  the  banks  of  the  Ural  River,  against  the  picturesque  back- 
ground of  the  Ural  Mountains. 

Thus  far,  four  blast  furnaces  and  eight  open  hearth  furnaces  are 
operating,  with  a daily  output  of  3500  tons  of  pig  iron  and  1500 
tons  of  steel.  The  coke  plant,  the  first  blooming  mill  and  the  first 
rolling  mill  unit  are  in  operation.  Neither  of  the  two  projected 
rail  mills  is  completed,  but  the  rolling  mill  is  turning  out  light  rails. 
Within  the  next  two  years,  the  mill  capacity  will  be  more  than 
doubled. 

The  first  blast  furnace  was  built  largely  with  foreign  materials, 
and  by  foreign  engineers  and  experts.  The  third  was  built  almost 
entirely  of  Soviet-made  materials.  It  was  designed  and  constructed 
by  Soviet  engineers  and  technicians. 

The  Magnitogorsk  mill  stretches  for  more  than  a mile  along 
the  Ural  River.  The  ore,  crushed  and  washed  on  the  slopes  of  the 
ore  mountain,  is  brought  to  one  end  of  the  plant,  together  with 
coal  from  the  Kuznetz  mines.  At  the  other  end  of  the  plant  are 
two  big  warehouses,  in  which  the  finished  steel  is  stored,  and 
beside  them  is  an  extensive  open  air  yard,  for  the  storage  of  pig 
iron.  A large  reserve  of  both  steel  and  iron  have  already  been 
accumulated  in  these  storage  spaces. 

The  Magnitogorsk  steel  plant  is  a modern,  electrified  mill, 
provided  with  the  most  up-to-date  technical  devices,  and  prepared 


EUROPE— WEST  AND  EAST 


35 


to  turn  out  an  important  part  of  the  iron  and  steel  needed  for  the 
industrialization  of  East  Europe. 

Magnitogorsk  is  one  among  the  many  industrial  plants  that  have 
been  built  in  East  Europe  since  1928.  They  include  every  field 
of  heavy  industry — mining,  metallurgy,  chemistry,  machine-build- 
ing. The  most  competent  technical  assistance  procurable  any- 
where in  the  world  has  been  called  upon  to  assist  in  the  planning 
and  construction  of  these  plants.  Within  an  incredibly  brief  space 
of  time,  East  Europe  has  been  transformed  from  an  industrially 
backward  area  into  the  largest  industrial  producer  on  the  European 
continent. 

The  record  of  Soviet  industrial  production  for  the  first  nine 
months  of  1934,  compared  with  the  like  period  in  1933,  tells  an 
impressive  story: 


Industry 

Production 
Jan. -Sept, 
1934 

Percent  increase 
over  Jan.-Sept. 
1933 

Coal 

mill,  tons 

68.4 

24.8 

Oil 

mill,  tons 

20.2 

15.9 

Pig  iron 

mill,  tons 

7.6 

49.7 

Steel  ingots 

mill,  tons 

6.9 

42.6 

Electricity 

bill.  kw.  hrs. 

9.4 

32.0 

Copper 

thous.  tons 

30.8 

8.8 

Aluminum 

thous.  tons 

9.9 

277.5 

Locomotives 

number 

845.0 

21.6 

Freight  cars 

number 

25,364 

64.0 

Tractors 

number 

72,865 

31.2 

Trucks 

number 

39,435 

35.3 

The  economists  and  business  men  of  West  Europe  who  scoffed 
at  the  First  Five  Year  Plan  as  “paper”  are  answered.  The  major 
industries  of  East  Europe  are  working — working  to  capacity,  and 
in  many  cases,  beyond  capacity.  They  are  turning  out  the  products 
needed  for  the  industialization  of  East  Europe,  and  they  are  doing 
it  without  the  stimulus  and  the  menace  of  private  profit, — under 
a socialized,  planned  economy. 

c.  Making  Soviet  steel 

It  was  early  on  a Thursday  morning — an  hour  before  daylight — 
in  the  communal  kitchen  of  a worker’s  apartment  house.  A dozen 
men  were  gathered  about  the  stove, — rubbing  ears  and  warming 
fingers,  for  it  was  freezing  hard  outside.  There  was  one  topic 
of  conversation:  “Would  the  bus  be  on  time?”  The  previous  day 
the  bus  had  been  late,  and  these  men  had  walked  four  kilometers 


36  EUROPE— WEST  AND  EAST 

to  their  work-places.  Must  they  walk  again  today? 

They  had  tumbled  out  of  bed  at  5:30,  eaten  a bite  of  breakfast 
and  made  ready  to  begin  work  with  the  7 o'clock  shift.  If  the  bus 
came,  they  had  time  to  spare.  If  it  did  not,  they  needed  nearly 
an  hour  to  reach  the  Magnitogorsk  steel  mill  where  they  were  all 
employed. 

The  six  o’clock  whistle  blew.  No  bus! 

Five  minutes  passed.  Still  no  bus! 

“All  right,  comrades,”  said  a big,  sturdy  furnaceman.  “No  bus, 
and  we  must  start  if  we  are  to  reach  our  work  places  on  time,” 
He  turned  his  collar  up  around  his  ears,  slipped  his  hands  into  his 
pockets,  and  went  out  into  the  cold,  bleak  street.  The  others 
followed  him — along  the  paved  road  to  a short-cut  across  the  open 
steppe.  A north  wind  blew;  snow  flakes  bit  into  their  faces.  The 
men  pushed  forward  in  twos  and  threes,  still  talking. 

“A  shame,”  said  one.  “No  bus  for  two  days  running.” 

“Right,”  answered  a second.  “And  how  can  we  do  our  work 
after  tramping  these  long  kilometers  through  the  cold?” 

“We  should  do  something  about  it,”  said  a third.  “What  is  the 
matter  with  Starchevitch  anyway?  He  should  attend  to  such 
things.” 

The  big  furnaceman  turned  half  around  without  slowing  up  his 
pace.  “You  are  right,  comrade,”  he  commented.  “We  must  do 
something.  We  need  busses,  in  good  running  order.  We  need 
gas  to  run  them.  We  need  a host  of  other  things.  How  are  we  to 
get  them?  We  cannot  go  to  the  boss  and  demand  them.  We  are 
our  own  boss.  That  means  that  we  must  turn  to  ourselves.  We 
must  do  our  jobs  better — improve  our  technique.  We  must  organ- 
ize better — improve  our  control.  These  things  are  in  our  hands. 
No  where  else  in  the  world  can  the  workers  decide,  as  we  can 
here,  what  is  to  be  done,  and  how  we  should  do  it.” 

He  stopped  talking  for  a minute  or  two  and  they  walked  on  in 
silence.  Then  he  began  again: 

“This  is  no  place  for  weaklings.  This  is  no  place  for  those 
whose  hearts  are  faint.  This  is  a battle-ground  where  we  are 
fighting  out  the  problems  of  the  world’s  workers  for  the  next  half 
century.  It  is  man’s  work.  Things  are  far  from  perfect  here.  We 
are  building  a new  world,  and  it  is  no  easy  task.  Each  day  this 
building  brings  us  face  to  face  with  new  problems.  We  must  solve 
these  problems  as  they  arise,  and  go  steadily  forward.  We  need 
the  work  of  thousands  of  technically  skilled  people.  We  are  a 
part  of  those  thousands,  and  until  we  gain  that  technical  skill,  we 
shall  get  nowhere.” 

There  was  no  word  of  dissent, — no  difference  of  opinion.  The 
workers  were  agreed.  It  was  their  job.  They  alone  were  res- 
ponsible to  themselves  for  the  results  they  got. 


EUROPE— WEST  AND  EAST 


37 


Half  an  hour  had  passed.  The  men  were  joining  other  workers, 
all  moving  through  the  dawn  toward  the  mill.  Soon  they  began 
to  meet  the  night  shift.  They  crossed  the  track,  entered  the  mill 
yards,  went  to  their  places,  got  their  tools  in  order  and  donned 
their  work  clothes.  The  seven  o’clock  whistle  sounded. 

“All  right,  fellows,”  said  a 21  year  old  foreman  to  his  gang  of 
40  skilled  workers.  “There’s  seven  o’clock.  Lets  go.” 

Such  is  the  spirit  that  animates  the  East  European  workers  as 
they  struggle  forward  toward  a better  world. 


III.  WHAT  LIES  AHEAD 

1.  The  Whirlwind 

Europe  West,  like  Europe  East,  is  in  the  grip  of  stupendous 
social  forces.  Through  generations  of  competition  and  of  im- 
perial expansion  these  forces  accumulated  in  the  form  of  fantas- 
tically unequal  living  standards;  in  the  form  of  furious  exploitation 
of  the  industrial  masses,  of  the  agricultural  population,  of  the 
colonial  peoples;  in  the  form  of  huge  surpluses  of  idle  capital  and 
of  unemployed  labor  power;  in  the  form  of  bitter  class  struggles; 
in  the  form  of  devouring  trade  and  military  wars  between  the 
ruling  classes  of  the  rival  empires;  in  the  form  of  national,  religious 
and  racial  jealousies  and  hatreds,  planted,  nurtured  and  stimulated 
by  church  and  state.  Discovery,  invention,  and  the  rapid  advance 
of  technics  equipped  these  menacing  social  forces  with  new  and 
potent  agencies  of  destruction.  Toward  the  end  of  the  last  century 
this  massed,  high-tensioned  social  storm-cloud  had  reached  the 
bursting  point.  In  1914  its  full  fury  broke  across  the  Western 
World,  and  through  two  decades  it  has  continued  to  scatter  des- 
truction, suffering  and  death. 

West  Europe,  battered  and  crippled,  is  drifting  before  the  storm. 
Its  old  leadership  is  discredited.  Its  chart  and  compass  went  over- 
board in  1914.  Its  people,  dazed  and  terrified,  are  huddled  like 
frightened  children  around  glib  demagogues,  listening  and  ac- 
cepting. They  no  longer  seek  to  understand,  to  organize,  to 
control,  to  direct.  They  have  lost  their  faith  in  themselves.  In- 
stead of  discussing  and  deciding,  they  cower  before  the  bayonets 
and  machine  guns  of  the  state,  or  throw  themselves  imploringly 
on  the  hard  stones  of  the  church. 

East  Europe,  its  working  class  at  the  helm,  has  weathered  the 
storm  and  is  holding  to  the  course  that  it  set  in  1918.  It  has 
suffered  heavy  losses,  but  at  no  time  has  it  given  up  its  confident 
belief  in  itself  and  in  its  historic  mission.  It  questions,  analyzes, 
plans,  organizes.  It  checks  its  mistakes,  tacks,  veers,  comes  about, 


38 


EUROPE — WEST  AND  EAST 


but  always  on  the  main  course.  It  is  stern,  determined,  incisive. 
It  proposes  to  control  its  destiny. 

The  storm  is  still  raging  in  Europe.  Years  will  pass  before 
it  blows  itself  out.  But  it  is  now  possible  to  determine  the  outlook 
for  the  West  European  millions  who  are  risking  their  lives  in  the 
hastily  reconditioned  hulk  of  capitalist  imperialism,  and  for  the 
East  European  millions  who  are  bending  their  energies  to  the  task 
of  rebuilding  the  ship  while  she  bucks  the  storm. 

2.  Europe  West 

a.  Income  and  Population 

Declining  income  is  the  grimmest  fact  facing  West  Europe.  The 
decrease  of  world  trade  has  contributed  to  this  decline.  So  has  the 
rise  of  Japan  in  the  East  and  of  the  United  States  in  the  West. 
So  has  the  breakdown  of  colonial  economy.  But  more  important 
than  any  one  of  these  causes  is  the  retreat  of  West  Europe  toward 
hand  labor  on  small  patches  of  agricultural  land. 

This  retreat  from  machine  industry  toward  hand  agriculture  can 
have  only  one  possible  result, — a progressive  decline  in  the  total 
national  income  until  a level  is  reached  at  which  a nation-bulk 
of  village  economy,  plus  a fringe  of  those  industries  most  essential 
to  the  maintenance  of  the  privileges  and  the  power  of  the  ruling 
class,  can  hope  to  sustain  itself  in  a state  of  tolerable  economic 
stability.  When,  by  repeated  experiment,  this  level  of  income  and 
of  economic  structure  is  determined,  the  ruling  classes  of  West 
European  states  will  attempt  to  approximate  it.  Until  that  time, 
they  will  continue  to  push  back  nearer  and  nearer  to  the  level  of 
a self-sufficient,  hand  agriculture. 

If  the  reduction  of  West  Europe’s  income  is  accompanied,  as  it 
has  been  thus  far,  by  an  increase  in  the  total  population,  and  of 
the  proportion  of  the  national  income  devoted  to  military  pur- 
poses, it  must  result  in  an  intensified  survival  struggle.  This  survival 
struggle  is  being  bitterly  fought  all  over  West  Europe, — within 
each  country,  a conflict  between  competing  class  interests;  among 
the  nations,  a war  to  the  death  for  resources,  trade  routes  and 
markets.  The  survival  struggle  between  rival  classes,  rival  nations, 
and  rival  empires  is  growing  ever  sharper.  To  talk  class  peace 
and  international  peace  in  West  Europe  to-day,  is  like  talking 
spring  flowers  and  sunshine  during  a Minnesota  blizzard. 

b.  The  Christian  Corporate  State 

Class  alignments  are  shifting  rapidly  in  this  West  European 
survival  struggle.  The  combination  of  monopoly  capital  and  bank 
capital  that  held  the  economic  life  of  West  Europe  by  the  throat 
in  1910  was  so  badly  crumpled  up  by  the  war,  and  so  severely 


EUROPE — WEST  AND  EAST 


39 


manhandled  by  the  depression,  that  in  1931  the  banks  were  no 
longer  able  to  support  their  over-expanded  industrial  and  com- 
mercial clients.  The  effort  to  do  so  in  the  face  of  fierce  interna- 
tional rivalries  pulled  down  first  the  Credit  Anstalt  of  Austria, 
and  then  the  banking  structure  of  Central  Europe.  Panic  reigned. 
The  central  banks  and  the  stronger  governments  hurried  to  sup- 
port the  weaker  financial  institutions  in  order  to  prevent  the  col- 
lapse of  the  entire  credit  structure.  This  1931  government  inter- 
vention in  the  banking  business  of  West  Europe  was  the  high 
point  in  the  post-war  shift  toward  the  increasing  state  regulation 
and  control  of  business  affairs.  Monopoly  capitalism  and  finance 
capitalism  had  had  their  day.  Now  they  were  giving  place  to  a 
regulated  private  economy  with  permanent  features  of  state  own- 
ership. 

Such  modifications  in  the  economic  function  of  the  State  involve 
the  abandonment  of  those  forms  of  democratic  self-government 
that  proved  so  useful  during  the  era  of  capitalist  expansion.  They 
also  involve  the  re-establishment  of  the  absolutist,  burocratic  state, 
with  its  supreme  control  over  the  lives  and  fortunes  of  those  in- 
dividuals who  are  not  immediately  directing  its  policies,  and  with 
the  iron  discipline  required  for  a reduction  of  general  living 
standards,  and  the  liquidation  of  important  sections  of  the  popula- 
tion. The  dictatorships  in  Hungary,  Italy  and  the  Balkans  led  the 
way  along  this  backtrack.  The  ruling  class  of  Germany  has  fol- 
lowed, by  making  one  man  leader,  chancellor  and  president,  with 
absolute  power  over  the  lives  and  fortunes  of  his  vassals.  The 
movement  away  from  democratic  institutions  is  probably  stronger 
today  than  it  has  been  at  any  time  during  the  past  fifteen  years. 

The  abandonment  of  democratic  institutions  and  the  return  of  an 
absolute  state,  is  of  course  accompanied  by  the  restoration  of  an 
authoritarian  church.  The  Roman  Church  is  not  only  regaining 
its  power  throughout  West  Europe,  but  it  is  exercising  an  increas- 
ing control  over  the  family,  the  school  and  the  state. 

The  general  decline  in  international  trade  and  finance,  and  the 
destruction  of  the  organized  labor  movement  all  through  central  and 
southern  Europe  has  left  the  League  of  Nations  and  the  Roman 
Church  as  the  two  important  international  organizations.  And  as 
between  the  two,  the  influence  exercised  by  the  Roman  Church 
over  West  European  politics  probably  stands  in  the  relation  of 
about  five  to  one.  Every  year,  during  the  past  decade,  while  the 
League  has  lost  in  influence,  the  Church  has  gained.  The  League 
still  clings  to  the  traditions  of  democracy.  The  decision  to  sup- 
port Christian  Corporate  States  definitely  throws  the  influence 
of  the  Roman  Church  against  the  old  democratic  forms,  which 
were  always  repugnant  to  its  doctrines  and  traditions,  and  on  the 


40 


EUROPE— WEST  AND  EAST 


side  of  the  new  fascist  governmental  institutions  that  are  being 
erected  across  West  Europe. 

The  new  ruling  class  structure  that  the  propertied  and  privileged, 
with  the  active  support  of  the  Roman  Hierarchy,  are  spreading 
across  West  Europe,  is  being  built  up  behind  the  personal  dic- 
tatorship of  demagogues.  It  includes,  among  its  more  important 
features,  the  preservation  of  private  property  in  the  means  of 
production;  the  maintenance  and  stabilization  of  ruling  class 
privileges;  the  elimination  of  all  specifically  working  class  organ- 
izations; the  reestablishment  of  the  absolutist  state  and  the 
authoritarian  church,  and  the  complete  control  of  all  means  of 
communication  or  propaganda. 

A dozen  years  ago  it  was  difficult  to  determine  the  lines  that 
the  luling  classes  of  West  Europe  would  follow  in  their  efforts  to 
escape  the  threat  of  chaos  on  one  side,  and  of  proletarian  revolu- 
tion on  the  other.*  The  last  twelve  months,  like  the  last  twelve 
years  of  West  European  history,  have  made  this  trend  clear  beyond 
any  possibility  of  question.  And  this  is  the  pattern  that  the  ruling 
classes  of  West  Europe  will  follow,  with  minor  modifications, 
during  the  years  that  lie  immediately  ahead. 

c.  Class  relations 

The  new  control  pattern  of  West  Europe  involves  four  impor- 
tant readjustments  in  class  relations:  (1)  the  shift  of  ruling  class 
power  from  monopoly  and  finance  capital  forward  merchant  and 
landed  capital;  (2)  the  destruction  of  all  working  class  organiza- 
tions and  the  establishment  of  a system  of  vassalage  for  the 
masses;  (3)  the  liquidation  of  the  new  middle  class,  and  (4)  the 
ruthless  subjugation  and  exploitation  of  national  and  racial 
minorities. 

(1)  Merchant  capital  and  landed  capital  are  playing  a role  of 
steadily  increasing  importance  in  the  polity  of  West  Europe.  This 
shift  in  the  ruling  class  power  centre  is  no  accident.  It  is  only  a 
few  years  since  all  Europe  was  ruled  by  a combination  of  merchant 
princes  in  the  trade  centres  and  landed  aristocrats  in  the  agricul- 
tural areas.  The  collapse  of  financial  imperialism  and  the  decline 
in  mass  commodity  production  is  forcing  a return  toward  this  pre- 
imperialist ruling  class  combination. 

Financiers  and  industrialists  are  cooperating  in  the  change. 
Some  do  it  grudgingly.  Others,  foreseeing  the  course  of  events, 
are  shifting  their  investments  to  conform  to  the  shift  in  profit 
and  power. 

(2)  For  the  masses  of  West  Europe, — the  250  or  275  millions 
upon  whose  sweat  and  blood  the  ruling  class  continues  to  live, — 
the  Christian  Corporate  State  offers  faith  in  ruling  class  leadership, 


EUROPE— WEST  AND  EAST 


41 


hope  in  blessedness  hereafter, — and  for  this  earth,  a life  of  vas- 
salage in  the  industrial  centres  and  on  the  land. 

The  permanent  army  of  the  unemployed  that  now  occupies  West 
Europe  is  the  chief  agency  in  the  enslavement  of  the  masses.  The 
worker  who  still  has  a job  must  do  what  he  is  told.  If  he  protests, 
one  of  the  workless  is  ready  to  take  his  place.  As  standards  of 
living  are  driven  down,  the  surplus  of  industrial  workers  is  faced 
by  hunger  back  toward  the  land,  where  it  competes  with  the  land 
workers.  The  latter,  with  their  families,  are  attached  by  economic 
and  social  pressure  to  the  land.  The  unemployed  surplus  from 
the  cities  thus  serves  as  a weapon  with  which  the  standard  of 
living  of  the  entire  working  class  can  be  forced  down  to  a sub- 
sistence level. 

Those  land  workers  who  to-day  have  small  farms  are  losing 
them  under  the  combined  pressure  of  high  taxes  and  low  prices. 
Through  this  process,  land  ownership  will  again  be  concentrated 
in  the  new  landed  aristocracy  and  in  the  church.  The  land  work- 
ers, as  tenants  or  day  laborers,  will  sow  and  reap  in  return  for  il- 
literate subsistence. 

The  new  pattern  of  ruling  class  control  calls  for  the  destruction 
of  all  working  class  organizations — trade  unions,  political  parties, 
co-operatives.  When  these  means  of  working  class  defense  are 
once  wiped  out,  the  ruling  class  can  more  easily  drive  the  masses 
back  toward  vassalage  and  serfdom. 

(3)  The  new  middle  class, — the  class  of  specialists  and  experts, 
— grew  up  during  the  era  of  capitalist  expansion.  With  the  ending 
of  that  era,  the  need  for  the  experts  disappears.  The  army  of 
engineers,  architects,  auditors,  advertisers,  managers,  and  salesmen 
is  being  rapidly  disbanded  all  over  West  Europe.  They  suffer 
pay  cuts.  Their  jobs  disappear.  Their  only  chance  for  livelihood 
is  to  find  jobs  among  the  ranks  of  the  wage-workers  or  to  join 
the  professional  armies  of  their  masters. 

The  professions  remain.  Doctors,  lawyers,  preachers  and  teach- 
ers will  continue,  but  in  decreasing  numbers,  to  serve  the  interests 
of  the  ruling  class.  As  their  numbers  decrease  the  struggle  for 
survival  will  force  out  the  independent  and  leave  the  subservient, 
until  the  “free”  professions  will  once  more  fawn  and  curry  favor- 
in  return  for  their  bread.  Artists  and  writers  will  again  seek  for 
patronage  at  the  feet  of  the  merchant  prince  and  the  landed  aris- 
tocrat. And  those  who  wish  to  hold  up  their  heads  and  speak 
their  minds  will  choose  between  the  fresh  air  and  sunshine  of 
some  mountainside  and  the  dungeons  of  a Bastille. 

(4)  Such  a pattern  of  social  control  involves  the  ruthless  sub- 
jugation and  exploitation  of  national  and  racial  minorities.  They 
are  easy  victims  because  they  differ  in  color,  nationality  or  religion 


42 


EUROPE— WEST  AND  EAST 


from  the  mass,  and  can  therefore  be  made  the  object  of  racial,  na- 
tional and  religious  hatreds.  The  Jews,  the  Bohemians,  the  Al- 
bigensese,  the  Huguenots,  and  other  minorities  were  persecuted 
during  the  Dark  Ages.  The  rising  tide  of  persecution  now  direct- 
ed in  Germany  and  Austria,  Poland,  and  other  Central  European 
countries  against  the  Jews  is  merely  one  sign  of  the  return  toward 
minority  subjugation. 

The  new  pattern  of  ruling  class  control  cannot  be  imposed  on 
West  Europe  without  a bitter  struggle.  In  this  struggle  the 
ruling  class  does  not  dare  to  rely  upon  the  ordinary  police,  or 
upon  the  conscript  armies  that  fought  the  War  of  1914  and  took 
part  in  the  revolutions  of  1917,  1918  and  1919.  Therefore,  partisan 
armies  have  been  and  are  being  organized  all  over  West  Europe. 
In  Italy  there  is  the  Fascist  Militia;  in  Germany  the  Storm  Troops 
and  the  Defense  Corps;  in  Spain  the  Civil  Guard,  the  Assault 
Guards  and  the  Security  Guards;  in  France  a large  corps  of  armed 
fascists,  drilled  and  ready  for  business.  These  special  armed  corps 
are  being  recruited  from  among  army  officers,  and  young  unem- 
ployed members  of  the  families  of  tradesmen,  of  small  land 
holders  and  of  minor  government  officials. 

Study  the  history  of  West  Europe  since  1919.  Examine  the 
present  trends.  The  pattern  is  unmistakable:  declining  income  and 
increasing  survival  struggle;  the  return  of  the  merchant-industrial- 
ist and  the  landholder  to  power;  the  abandonment  of  popular 
government;  the  absolute,  separatist  state;  the  authoritarian  church; 
the  liquidation  of  the  new  middle  class;  vassalage  for  the  masses; 
and  subjugation  of  the  minorities.  This  pattern  is  being  worked 
out  under  the  guns  of  pretorian  guards,  carefully  picked,  and  school- 
ed and  paid  to  do  the  will  of  their  masters.  Follow  the  events  of 
West  Europe  during  the  coming  days  and  note  how  readily  they 
fit  into  this  picture. 

d.  International  alignments 

The  retreat  from  mass  machine  production  toward  hand  agricul- 
ture within  the  principal  nations  of  West  Europe  is  closely  paral- 
lelled by  the  retreat  from  international  economic  co-operation 
toward  national  economic  self-sufficiency.  Modern  technique  in 
transport  and  communication  obliterates  frontiers.  The  statecraft 
of  West  Europe,  in  open  defiance  of  this  technique,  builds  the 
frontiers  of  each  nation  ever  higher,  with  tariffs,  subsidies,  quotas, 
immigration  prohibitions  and  other  restrictions  that  aim  to  insure 
the  economic  independence  of  every  sovereign  state. 

The  pursuit  of  this  autarchic  goal  is  driving  West  Europe  steadily 
toward  an  economic  sectionalism  under  which  each  local  region 
will  produce  for  itself,  and  consume  little  more  than  it  produces. 


EUROPE— WEST  AND  EAST 


43 


To  achieve  this  result,  the  majority  of  workers  must  dig  their 
living  from  the  land  with  tools  produced  by  the  village  craftsmen. 
Centralized  economy  must  be  reduced  to  the  minimum  needed  to 
maintain  the  efficiency  of  the  state  apparatus.  Imports  must  be 
rigidly  held  to  an  amount  that  can  be  paid  for  by  the  diminished 
exports. 

This  nationalistic  trend  has  dominated  the  economy  of  West 
Europe  since  the  end  of  the  war.  All  efforts  to  check  the  national- 
istic current  have  failed.  The  World  Monetary  Conference  held  in 
London  in  1933  failed  even  more  dismally  than  the  World  Econo- 
mic Conference  of  1927.  The  delegates  to  these  and  other  similar 
conferences  all  knew,  and  many  of  them  said,  that  the  one  hope 
for  the  future  of  international  economic  relations  lay  in  co-opera- 
tion, and  every  delegate  who  thought  this,  or  who  said  it,  re- 
presented a government  that  was  doing  everything  in  its  power 
to  establish  economic  self-sufficiency  within  its  own  boundaries, 
and  thus  to  make  international  co-operation  impossible. 

National  sovereignty — that  is,  economic  and  political  self-suf- 
ficiency— is  based  on  the  maxim:  “Every  nation  for  itself.”  The 
counterpart  of  that  maxim  is:  “Every  nation  against  its  neighbors.” 
The  nations  of  West  Europe  that  are  struggling  to  survive  are 
following  lines  of  policy  dictated  by  the  general  historic  situation 
in  which  the  survival  struggle  is  taking  place. 

Great  Britain  has  ruled  the  world,  as  nearly  as  any  one  modern 
nation  has  ever  ruled  it, — for  the  past  two  centuries.  She  has 
ruled  by  a simple  formula,  cleverly  modified  and  widely  applied: 
“Divide  and  subjugate.”  She  has  applied  this  formula  to  her 
colonies,  to  her  neighbors,  to  her  rivals.  She  is  applying  it  to- 
day. She  is  playing  Germany  and  Italy  against  France  because 
France  is  strong  enough  to  menace  the  British  position  in  West 
Europe.  She  is  playing  the  United  States  against  Japan  because 
both  empires  threaten  her  world  markets  and  her  world  power. 

French  diplomacy  wrote  the  Treaty  of  1919.  To-day  French 
statesmen  and  military  leaders  are  preparing,  reluctantly,  to  ac- 
cept the  consequences  of  that  robber  peace,  and  to  organize  a 
West  European  block  for  a new  war  that  will  secure  the  con- 
quests of  1919  by  crushing  and  dismembering  Germany.  At  the 
same  time,  French  statesmen  are  seeking  to  checkmate  every  move 
of  Italy  in  Middle  Europe  and  in  North  Africa. 

Germany  is  rearming.  Nazi  propagandists  have  whipped  the 
younger  generation  into  a frenzy  of  patriotic  enthusiasm  that  now 
demands  the  restoration  of  the  pre-war  boundaries  of  the  Father- 
land,  and  the  union  of  all  Germanic  peoples  into  one  unit  of 
privilege  and  power. 

Italian  statesmen — or  rather,  the  one  Italian  statesman  who  has 


44 


EUROPE— WEST  AND  EAST 


any  authority  to  speak  for  the  42  million  people  of  Italy — are  de- 
manding the  shores  of  the  Adriatic  as  the  first  step  in  the  restora- 
tion of  the  empire  once  ruled  from  Rome.  This  same  statesman 
has  enthused  the  Italian  youth  with  a fervent  zeal  for  a supreme 
Italy. 

With  the  policies  of  every  major  power  of  West  Europe  directed 
toward  national  self-sufficiency  and  aggrandizement,  there  can  be 
no  more  question  as  to  the  outcome  of  the  moves  for  naval  disar- 
mament than  there  was  as  to  the  outcome  of  the  moves  for  general 
disarmament.  The  conversations  regarding  naval  strength  have 
clearly  showed  the  intent  of  the  chief  contestants  for  world  power: 
to  build  navies  larger  than  those  of  their  rivals.  When  the  new 
diplomatic  lineup  is  well  established,  war  will  follow  the  first 
serious  provocation. 

One  baffling  problem  remains  for  the  statesmen  of  West  Europe 
— an  alliance  strong  enough  to  crush  the  Soviet  Union.  The  in- 
vasions by  the  armies  of  Japan,  Britain,  France,  the  United  States 
and  Poland  failed  in  the  years  from  1917  to  1921.  Since  that  time, 
one  effort  after  another  to  build  an  effective  anti-Soviet  block  has 
broken  down  because  of  the  intensity  with  which  the  nations  of 
West  Europe  were  fighting  one  another.  Now,  with  the  Soviet 
Union  in  the  League  of  Nations  and  playing  an  active  part  in 
European  politics,  a united  anti-Soviet  front  is  even  less  probable. 
The  will  to  crush  the  Soviet  Union  has  not  been  lacking  at  any 
time  since  1917.  Business  men,  statesmen  and  churchmen  have 
been  loud  in  their  denunciations,  and  in  their  demands  for  action. 
But  though  the  will  was  strong,  the  way  was  lacking.  To-day, 
with  Soviet  orders  for  machinery  as  a bludgeon,  even  so  implacable 
a foe  of  the  Soviet  Union  as  Adolf  Hitler  has  been  forced  to  about- 
face  in  order  to  hold  Russian  trade  for  German  business  men. 

e.  The  drift  toward  war  and  revolution 

Some  who  read  this  sketch  of  the  trend  of  international  politics 
in  West  Europe  will  feel  that  it  is  hopeless  and  pessimistic.  Hope- 
less it  surely  is,  in  so  far  as  the  capitalist  system  is  concerned. 
That  system  has  expanded  to  the  full  extent  of  its  possibilities;  has 
fulfilled  its  historic  role,  and  is  now  decaying,  with  results  that 
spell  disaster  for  all  whose  living  depends  upon  capitalist  economy. 
But  pessimistic  it  surely  is  not,  because,  as  the  years  pass,  it  be- 
comes clearer  that  the  working  masses  not  only  hold  in  their 
hands  the  key  that  will  open  a way  of  escape  from  the  horrors  at- 
tending the  death  of  a social  system,  but  that  they  are  preparing 
themselves  to  use  that  key  in  the  not  distant  future. 

The  working  masses  of  West  Europe  are  losing  their  faith  in 
the  institutions  of  democracy.  Twenty  years  ago  this  faith  was 


EUROPE— WEST  AND  EAST 


45 


all  but  universal.  It  was  voiced  by  the  liberals,  and  chorused  by 
the  leaders  of  the  socialist  parties.  The  War  of  1914  began  the 
disillusionment,  but  preconceptions  and  prejudices  die  hard.  The 
workers  in  the  Balkan  and  Baltic  states  saw  democratic  institu- 
tions vanish,  and  dictatorships  take  their  places.  Italy,  Austria, 
Germany  and  Spain  followed  suit.  To-day  France  is  preparing  to 
fall  in  line.  Some  of  the  older  Socialist  leaders  still  talk  the  clap- 
trap of  gradualism,  legalism,  and  the  conquest  of  power  through 
parliamentary  means.  Others  have  become  active  servants  of  the 
ruling  class.  Through  these  experiences  the  masses  are  learning. 
The  younger  generation  of  revolutionaries  has  no  interest  in  demo- 
cratic institutions.  The  growth  of  the  united  front  movements  in 
Austria,  Germany,  France  and  Spain  is  a clear  indication  of  the 
new  view  that  is  gaining  ground  among  the  masses:  the  workers 
must  unite,  and  they  must  take  power  before  their  organizations 
are  crushed  under  the  new  apparatus  of  ruling  class  control.  It 
is  too  late  for  the  workers  of  Italy,  Austria  and  Germany  to  buiid 
their  united  front  openly.  Efforts  there  must  continue  under- 
ground. In  France,  Belgium,  Holland,  Britain,  Spain  and  the 
Scandinavian  countries,  there  is  still  a chance  for  the  united  front 
to  gain  a legal  foothold. 

As  West  Europe  moves  toward  war,  the  revolutionary  forces 
in  every  country  continue  their  preparations  for  the  seizure  of 
power.  The  preparations  for  war  and  for  revolution  go  on  side 
by  side.  War  will  crumple  up  the  newly  organized  ruling  class 
pattern  of  subjugation  and  exploitation,  and  revolution  will  burn  up 
the  last  vestiges  of  ruling  class  control,  and  will  open  the  way  for 
the  co-operative  organization  of  all  Europe. 

3.  Europe  East 

a.  Socialist  construction 

While  West  Europe  drifts  and  flounders  toward  war  and  revolu- 
tion, East  Europe  continues  its  vastly  important  self-imposed  task, 
— the  building  of  a co-operative  society  free  from  classes  and  from 
exploitation,  in  which  those  who  work  enjoy  the  fruits  of  their 
labor.  The  task,  begun  in  a technically  backward  country  and 
carried  forward  through  the  era  of  the  world  economic  crisis,  has 
involved  baffling  difficulties  and  the  overcoming  of  many  seeming- 
ly insuperable  obstacles. 

One  of  the  most  phenomenal  aspects  of  the  whole  East  European 
situation  is  the  way  in  which  the  workers  have  faced  up  to  those 
difficulties.  As  one  observer  put  it:  “The  real  heroes  of  the  Rus- 
sian Revolution  are  the  workers.”  Despite  shortages  in  food,  in 
housing,  in  materials,  tools  and  equipment,  they  have  pressed 


46 


EUROPE— WEST  AND  EAST 


resolutely  forward.  Only  during  the  past  two  or  three  years  have 
they  seen  daylight  ahead. 

Beginning  with  the  strenuous  days  of  socialist  construction,  in 
1927-28,  the  workers  were  asked  to  adopt  an  economic  policy 
under  which  half  of  the  national  income  was  to  be  locked  up  in 
such  capital  forms  as  mines,  smelters,  steel  mills,  chemical  plants 
and  railroads.  They  accepted  this  program,  and  with  it  such 
serious  consequences  as  food  shortages,  rationing,  a goods  famine 
and  inflation.  Year  after  year  the  workers  received  wages  which 
they  could  not  spend  because  the  stores  were  empty.  Year  after 
year  they  went  to  the  free  market  and  paid  high  prices  for  the 
necessaries  that  were  unobtainable  in  the  cooperative  stores. 

By  1932  it  was  evident  that  this  policy  had  won  out.  Today  its 
soundness  is  demonstrated  to  the  satisfaction  of  the  entire  Soviet 
Union.  Basic  industries  have  been  established  which  are  working 
successfully.  That  is,  they  are  turning  out  the  metals,  fuels,  raw 
materials  and  machine  tools  needed  in  a modern  society. 

Socialist  construction  aims  to  provide  not  only  the  economic 
base,  but  the  entire  framework  for  a social  organization  in  which 
human  beings  can  enjoy  freedom  and  opportunity.  It  reaches  its 
fullest  expression  in  the  building  of  socialist  cities,  in  which  every 
aspect  of  life  is  provided  for, — housing,  health,  education,  recrea- 
tion. 

Socialist  cities  are  being  built  today  throughout  the  whole  Soviet 
Union.  In  European  Russia  and  across  Siberia  they  are  rising,  and 
with  them  a wholly  new  life  is  coming  into  being.  Masses  of 
people,  largely  poor  peasants,  who  in  the  past  could  hope  for  no- 
thing from  life  except  the  barest  subsistence,  see  their  horizons 
broadening  from  one  day  to  the  next.  For  them  and  for  their 
children  life  has  taken  on  an  entirely  new  meaning. 


b.  Increase  in  production  and  income 


The  first  and  most  obvious  index  of  the  success  attending  social- 
ist construction  appears  in  the  increase  of  production  and  income. 
The  policy  of  building  heavy  industries  first  has  placed  the  Soviet 
Union  in  a position  to  provide  practically  all  of  its  own  machine 
tool  needs.  The  result  is  that  in  1934  the  necessary  locomotives, 
cars,  motors,  turbines,  tractors,  agricultural  machines,  lathes  and 
other  power  machines,  electrical  and  telephone  equipment  were  all 
being  produced  in  East  Europe.  Five  years  ago  the  Soviet  Union 
was  dependent  on  the  heavy  industry  of  the  outside  world.  Today 
it  is  in  most  respects  independent,  and  its  ratio  of  independence  is 
growing  from  day  to  day. 

In  the  early  years  of  industrialization  the  purchase  of  machine 
equipment  from  abroad  was  made  possible  only  by  the  export  of 


EUROPE— WEST  AND  EAST 


47 


very  large  quantities  of  raw  materials  and  food  products.  With 
the  coming  of  independence  in  machine  tools,  this  stream  of  ex- 
ported raw  materials  and  food  products  is  now  being  turned  into 
the  home  market  to  augment  the  supply  of  goods  available  for 
domestic  consumption. 

The  policy  of  building  production  goods  first  has  also  put  the 
Soviet  Union  in  a position  to  divert  its  national  income  quickly  and 
easily  from  the  production  of  capital  goods  to  the  production  of 
consumption  goods.  This  change,  which  mainly  distinguishes  the 
First  from  the  Second  Five  Year  Plan  is  now  being  made  through- 
out the  Soviet  Union.  In  the  course  of  the  next  two  or  three 
years,  not  only  will  the  facilities  for  producing  consumption  goods 
be  greatly  enlarged,  but  the  actual  stream  of  goods  flowing  into 
the  cooperative  stores  will  be  vastly  increased.  Heavy  industry, 
once  established,  continues  to  turn  out  production  equipment.  Pro- 
duction equipment  as  it  is  installed  adds  to  the  flow  of  consumption 
goods. 

The  figures  showing  the  increase  in  Soviet  production  and  in- 
come therefore  tell  only  half  the  story,  in  so  far  as  the  Soviet 
consumer  is  concerned.  Production  and  income  have  increased 
rapidly,  but  since  that  increase  was  directed  chiefly  toward  the 
production  of  capital  goods,  the  Soviet  workers  now  find  them- 
selves in  the  possession  of  an  immensely  valuable  heavy  industry 
plant.  Year  by  year  this  plant  will  continue  to  augment  Soviet 
production  facilities,  and  thus  multiply  the  quantities  of  consump- 
tion goods. 

There  is  no  fear  of  overproduction  in  the  Soviet  Union.  Nor  is 
there  need  to  plough  under  and  destroy  goods  once  they  are 
produced.  The  Soviet  market  absorbs  all  of  the  goods  that  come 
to  it  and  cries  for  more.  The  chief  task  of  Soviet  economy  during 
the  coming  years  will  be  the  supply  of  that  market. 

Production  and  income  will  both  continue  to  increase  in  East 
Europe.  The  heavy  industries  are  turning  out  the  machines  needed 
in  mass  production,  and  the  Soviet  market  will  continue  to  take 
immense  quantities  of  goods  so  long  as  the  standard  of  living  of 
the  population  continues  to  expand. 

c.  Liquidating  classes  and  the  state 

The  officially  declared  objective  of  the  Second  Five  Year  Plan 
is  the  removal  from  the  Soviet  Union  of  the  last  vestiges  of  capital- 
ism. This  program  envisages  the  liquidation  of  classes  and  the 
withering  away  of  the  state. 

Many  steps  have  been  taken  in  the  direction  of  class  liquidation. 
In  the  early  years,  land  and  industrial  capital  were  socialized. 
Recently  efforts  have  been  directed  mainly  toward  breaking  down 


48 


EUROPE-WEST  AND  EAST 


the  power  of  the  village  kulaks  or  profiteers^  The  collectivization, 
now  almost  complete  in  the  main  agricultural  areas  of  the  Soviet 
Union,  removes  the  last  economic  base  of  capitalist  power. 
Agriculture,  like  mining,  manufacturing,  banking  and  merchandising 
is  now  a collective  enterprise. 

Members  of  the  former  exploiting  classes  remain  in  Russia,  but 
in  constantly  decreasing  numbers,  and  their  children  are  being 
absorbed  by  the  collective  life.  A few  petty  tradesmen  and  hand 
craft  workers  still  carry  on,  but  they  are  not  numerous  and  they 
have  little  influence.  Individual  farmers  and  members  of  collective 
farms  sometimes  sell  their  wares  in  the  bazaars  and  in  the  open 
market.  They  constitute  perhaps  the  largest  single  factor  of 
private  trade  remaining  in  the  Soviet  Union.  Again,  however,  in 
comparison  with  the  entire  economy,  their  role  is  unimportant. 
Those  who  have  bought  Soviet  bonds  and  those  who  have  put 
money  in  the  savings  banks  are  paid  interest,  but  they  are  for  the 
most  part  workers  with  steady  jobs  who  live  on  their  earnings  and 
not  on  their  property.  By  and  large,  Soviet  economic  life  has  been 
collectivized  and  the  economic  basis  for  class  division  has  been 
virtually  wiped  out. 

The  state,  according  to  Marxian  theory,  is  organized  and  main- 
tained as  an  official  expression  of  class  division  and  conflict.  With 
the  basis  of  class  division  removed  and  the  reason  for  the  existence 
of  the  state  destroyed,  the  state  itself  must  soon  “wither  away.” 

The  signs  of  such  a change  are  already  appearing  in  the  complete 
reorganization  of  the  Soviet  trade  unions  which  is  now  in  process. 
This  reorganization  follows  closely  upon  the  heels  of  the  abolition 
of  the  department  of  labor  and  of  the  transfer  to  the  trade  unions 
of  the  responsibilities  formerly  exercised  by  that  department.  The 
administration  of  factory  inspection,  industrial  safety  and  health, 
for  example,  have  now  become  trade  union  functions.  The  trade 
unions  also  administer  the  social  insurance  funds,  and  carry  on 
large-scale  educational  and  cultural  activities.  The  trade  unions 
also  assume  important  responsibilities  for  quantity  and  quality  in 
production.  Thus,  the  trade  unions,  with  their  19  million  mem- 
bers are  a directing  factor  of  first-rate  importance  in  Soviet  public 
life. 

Such  changes  are  regarded  as  first  steps  toward  the  breaking  up 
of  the  Soviet  state.  While  the  Soviet  Union  is  surrounded  by 
hostile  capitalist  empires,  certain  aspects  of  the  state  apparatus 
must  remain  intact.  Internally,  however,  as  the  successes  of  social- 
ist construction  destroy  the  last  traces  of  capitalism,  it  becomes 
increasingly  possible  to  follow  a program  looking  toward  the  ul- 
timate liquidation  of  the  state  apparatus. 

While  West  Europe  intensifies  its  system  of  exploitation  and 


EUROPE— WEST  AND  EAST 


49 


turns  toward  a village  economy  under  the  domination  of  an  ab- 
solutist state  and  an  authoritarian  church,  East  Europe  is  abolish- 
ing classes,  and  preparing  the  way  for  a liquidation  of  the  state. 
As  for  the  church,  it  occupies  a quite  unimportant  corner  in  the 
new  culture  pattern  of  East  Europe. 

d.  Security  and  opportunity 

The  successes  of  socialist  construction  are  adding  daily  to  the 
security  of  life  for  the  masses  of  people  in  East  Europe.  The  fear 
of  unemployment  disappeared  in  1931.  Social  insurance  and  the 
system  of  social  medicine  removes  for  the  individual  and  his  family 
the  fear  of  hardship  involved  in  accident,  sickness  or  the  death  of 
a breadwinner.  The  recent  increases  in  the  available  supply  of 
consumption  goods  assures  every  worker  a sufficiency  of  the  simpler 
necessaries.  The  steady  advance,  year  after  year,  in  productivity 
and  in  income  promises  corresponding  improvements  for  the  future. 

The  average  worker  in  the  Soviet  Union  today  enjoys  a sense 
of  security  which  no  group  or  class  anywhere  in  West  Europe  can 
feel.  As  yet  the  Soviet  worker  has  less  consumption  goods  than 
the  well-to-do  of  West  Europe,  but  he  does  not  share  the  uncer- 
tainties and  fears  which  beset  their  future.  His  position,  as  re- 
gards security,  is  incomparably  better  than  that  of  the  West 
European  worker. 

Equally  important  gains  are  being  made  by  the  East  European 
masses  with  respect  to  opportunity.  Socialist  construction  has 
included  the  building  of  schools,  clubs  and  theatres  as  well  as 
factories,  railroads  and  ships.  Each  year  the  number  of  school 
children  increases.  Each  year  the  number  of  concerts,  of  operas, 
of  theatre  performances,  of  sport  features,  of  travel  opportunities 
is  augmented. 

Illiteracy,  among  the  younger  people,  has  disappeared.  News- 
papers, magazines  and  books  are  published  in  many  languages  and 
are  designed  to  fit  all  tastes  and  to  meet  all  interests.  The  number 
of  adults  attending  schools  and  classes  exceeds  the  number  of 
children. 

The  advances  on  the  cultural  front  are  the  “dividends”  of  social- 
ist construction.  When  the  present  ambitious  plans  for  industrial- 
ization were  launched,  the  Soviet  workers  were  told  that  they 
would  get  their  returns  in  the  form  of  a fuller  life.  Today  these 
promises  are  being  kept.  And  so  far  as  the  Soviet  masses  can 
see,  there  is  no  reason  why  these  advances  in  the  culture  front 
should  not  continue  for  many  years  to  come. 

fe.  Equalizing  social  life 

Socialist  construction  aims  at  the  equalization  of  social  life.  The 
contrasts  and  conflicts  existing  in  West  Europe  between  rival 


50 


EUROPE— WEST  AND  EAST 


classes,  between  men  and  women,  between  city  and  country,  and 
between  national,  racial  and  religious  groups  are  to  give  place  to  a 
form  of  social  organization  in  which  all  individuals  enjoy  a sub- 
stantial equality  of  opportunity.  Important  gains  are  being  made 
by  the  Russian  workers  in  all  of  these  directions. 

Enough  has  already  been  said  to  indicate  the  character  of  these 
gains  with  regard  to  class  relations  and  the  relation  of  city  and 
country.  Socialized  ownership  and  the  social  control  of  income 
cut  away  the  foundations  of  class  division.  The  collectivization 
and  mechanization  of  agriculture  left  agrarian  communities  to  the 
economic  and  cultural  level  enjoyed  by  industrial  centres.  The 
bitter  contrast  between  owner  and  worker  has  already  disappeared 
from  the  life  of  East  Europe,  and  the  successful  collectivization  of 
agriculture  means  that  the  backward  countryside  will  soon  be  living 
on  the  same  culture  level  as  the  industrial  town. 

East  Europe  is  making  important  advances  toward  equal  econo- 
mic and  social  status  for  men  and  women.  Both  receive  equal 
pay  for  equal  work.  Boys  and  girls  have  equal  educational  op- 
portunity. Young  men  and  women  enjoy  equal  freedom  in  the 
choice  of  their  professions.  Still  more  significant,  however,  are 
the  successes  which  have  been  achieved  in  drawing  women  into 
positions  of  public  responsibility. 

Many  of  the  women  of  Tsarist  Russia,  particularly  in  parts  of 
Asia,  were  little  better  than  slaves.  They  were  not  only  generally 
illiterate,  but  their  lives  were  limited  to  domestic  drudgery  or 
parasitism.  Today  these  women  and  their  daughters  are  doing 
their  part  in  building  a classless  society.  They  are  in  the  schools 
and  colleges,  as  pupils  and  teachers;  they  are  workers  and  directors 
in  health  work,  in  industry,  in  agriculture;  they  are  local  officials, 
legislators,  judges.  While  the  women  of  West  Europe  are  being 
told  to  go  back  to  “kitchen,  cooking  and  children/’  the  women  of 
East  Europe  are  welcomed  to  positions  of  partnership  in  the  task 
of  building  a new  world. 

Similar  successes  have  been  won  in  the  adjustment  of  inequalities 
between  the  various  racial  and  nationality  groups.  Tsarist  Russia 
exploited  the  backward  groups  mercilessly.  Soviet  policy  offers 
special  facilities  to  the  backward  groups  to  raise  their  cultural 
level  in  the  shortest  possible  time  to  that  of  the  most  advanced. 
This  policy,  applied  to  the  building  of  power  stations,  factories, 
schools  and  hospitals  has  linked  the  many  racial  and  national  groups 
together  for  the  achievement  of  one  common  purpose, — the  lifting 
of  the  culture  level  of  the  whole  of  East  Europe.  Racial  hatreds 
and  national  animosities  are  forgotten  in  the  common  enterprise. 

The  advance  toward  the  equalization  of  opportunity  means  the 
building  up  of  a unified  community  in  which  conflict  is  replaced  by 


EUROPE-WEST  AND  EAST 


51 


cooperation.  East  Europe  is  building  a form  of  society  in  which 
social  peace  will  be  not  a pious  hope,  but  the  normal  result  of 
economic  and  social  cooperation. 

f.  The  Soviet  Union  and  the  world 

East  Europe  is  not  interested  in  any  policy  of  imperial  expan- 
sion. Immediately  after  the  1917  Revolution  it  denounced  the 
Tsarist  treaties  which  gave  Russia  special  privileges  in  Turkey, 
Persia,  China,  and  other  neighboring  countries.  During  the  inter- 
vening years  this  policy  has  been  faithfully  followed  in  all  dealings 
between  the  Soviet  Union  and  the  outside  world. 

Three  factors  lie  at  the  base  of  Soviet  foreign  policy:  the  Soviet 
Union  does  not  seek  additional  territory;  it  needs  technical  as- 
sistance; it  hopes  and  works  for  peace.  Capitalist  statesmen,  at 
Geneva  and  elsewhere,  have  scoffed  at  the  Soviet  demands  for 
peace  as  “insincere”  and  “propaganda.”  Because  their  whole 
training  has  been  in  the  imperial  survival  struggle,  they  cannot 
understand  a form  of  social  organization  in  which  peace  is  an 
asset.  But  socialist  construction  from  its  very  nature,  depends  for 
its  success  upon  cooperation  and  peace.  Long-term  economic  and 
social  plans  can  achieve  their  objectives  or  no  other  basis.  Hence 
the  determination  with  which  Soviet  diplomats  have  followed  the 
peace  line  since  the  end  of  the  invasions  and  civil  wars  in  1921. 

East  Europe  today  is  pursuing  a peace  policy.  It  has  no  desire 
to  annex  any  of  the  territory  of  neighboring  countries.  It  has  no 
imperial  ambitions  in  the  direction  of  foreign  markets,  trade  routes 
or  colonies.  The  system  of  socialized,  planned  economy  which 
dominates  the  life  of  East  Europe  demands  such  a peace  policy. 
Under  it  the  pressure  of  accumulating  capital  toward  foreign  profit- 
making opportunities  is  non-existent. 

Socialist  construction  had  depended  largely  upon  technical  help 
and  mechanical  equipment  from  the  more  highly  industrialized 
capitalist  nations.  Therefore  East  Europe  has  imported  from 
West  Europe  both  technicians  and  technical  equipment.  Today 
the  amount  of  this  imported  assistance  is  diminishing,  but  for 
some  years  to  come  such  assistance  will  still  be  advantageous  to 
the  Soviet  Union. 

The  success  of  socialist  construction  in  East  Europe  depends,  to 
a very  considerable  extent,  upon  freedom  from  outside  conflicts. 
If  the  Soviet  Union  were  forced  into  a war,  the  work  of  con- 
struction would  of  course  be  abandoned  in  favor  of  '-he  production 
of  military  supplies.  International  peace  is  therefore  or  particular 
advantage  to  East  Europe. 

During  1933  and  1934  the  Soviet  Union  concluded  or  renewed 
non-aggression  pacts  with  all  of  its  near  neighbors.  In  the  year 


52 


EUROPE— WEST  AND  EAST 


1934  it  exchanged  ambassadors  with  the  United  States  and  entered 
the  League  of  Nations.  These  efforts  in  the  direction  of  coopera- 
tion and  peace  are  aimed  to  safeguard  the  work  of  socialist  con- 
struction in  East  Europe  against  the  possibility  of  war. 

Since  1919  the  Soviet  Union  has  been  a revolutionary  oasis  in 
a desert  of  world  reaction.  On  every  side  were  armies,  ready  to 
march  at  the  call  of  bankers,  manufacturers  and  traders  whose 
source  of  wealth  and  power  was  threatened  by  the  successes  of 
socialist  construction.  As  a defense  against  this  iron  ring  of  class 
enemies,  the  Soviet  Union  maintains  its  Red  Army.  Without  that 
army,  the  Union  of  Socialist  Soviet  Republics  would  have  ceased 
to  exist  in  1918  or  1919. 

The  workers  of  East  Europe  are  not  indifferent  to  the  outside 
world.  On  the  contrary,  their  publications  are  filled  with  interna- 
tional news  and  information.  They  hope  and  believe  that  in  the 
not  distant  future,  workers  in  other  parts  of  Europe  and  Asia  will 
follow  the  example  of  the  Chinese  and  Spanish  workers  by  taking 
power,  establishing  a government  of  workers  and  farmers  and 
making  a supreme  effort  to  sweep  aside  the  last  remnants  of  the 
decaying  capitalist  system.  Every  such  attempt  is  followed  by 
the  Soviet  masses  with  breathless  expectancy.  At  the  same  time, 
the  Soviet  workers  realize  that  the  work  of  building  a Soviet 
Europe  cannot  be  done  in  Moscow,  but  that  that  is  a task  for  the 
workers  of  Vienna,  Berlin,  Paris  and  Madrid. 

While  the  workers  of  East  Europe  wait  for  the  West  European 
masses  to  free  themselves  from  the  chains  of  wage  slavery  and 
to  join  in  the  building  of  a soviet  world,  they  leave  no  stone  un- 
turned in  their  efforts  to  continue  the  work  of  socialist  construc- 
tion. They  regard  East  Europe  as  the  pioneer  in  the  liberation  of 
the  masses  of  mankind.  They  think  of  themselves  and  their  or- 
ganizations as  leaders  along  the  path  that  the  entire  human  race 
must  travel  to  new  heights  of  experience  and  opportunity. 

4.  Two  Europes  in  Conflict 

Two  Europes — two  social  systems — two  culture  levels  are  com- 
peting against  each  other.  Both  cannot  continue  side  by  side  on 
the  same  continent,  or,  for  that  matter,  on  the  same  planet. 

The  system  in  West  Europe  works  mere  easily  than  that  in  East 
Europe, — like  a machine  that  has  been  broken  in,  its  parts  are 
adjusted  to  each  other;  like  a worker  who  has  learned  his  trade, 
until  one  action  follows  its  predecessor  almost  automatically.  Thus 
West  Europe  runs  along  despite  the  mortal  blows  delivered  by 
economic  collapses,  wars  and  revolutions. 

The  system  in  East  Europe  is  new,  raw,  unadjusted.  The  parts 
are  not  worn  smooth.  The  hands  are  clumsy  and  fumbling.  And 


EUROPE— WEST  AND  EAST 


53 


every  advance  is  an  advance  into  the  untried  and  the  unknown. 

The  system  in  East  Europe  is  technically  sounder  than  that  in 
i^kWest  Europe.  West  Europe  used  science  in  the  building  of  its 
^^lathes  and  its  locomotives,  and  in  the  construction  of  its  factories 
and  office  buildings.  But  its  agriculture  dragged  a heavy  load  of 
tradition,  and  its  entire  economy  blundered  planlessly  in  the  wild 
jungles  of  the  competitive  market.  East  Europe  is  employing 
science  throughout  its  entire  social  system.  Each  aspect  of  social 
life  is  examined,  analyzed,  discussed,  designed,  organized  and  con- 
trolled. No  single  phase  is  left  to  whim  or  chance.  The  workers 
of  East  Europe  believe  that  human  beings  are  capable  of  directing 
their  social  destiny.  They  have  set  out  to  achieve  this  result,  and 
to  achieve  it  with  a maximum  of  efficiency,  both  in  planning  and 
in  execution. 

Historically,  East  Europe  enjoys  an  immense  advantage  over 
West  Europe.  The  West  European  social  system  is  old  and  worn. 
It  has  lived  out  its  life,  and  fulfilled  its  possibilities.  Exhaustion 
and  disintegration  are  showing  themselves  throughout  its  struc- 
ture. The  social  system  of  East  Europe  is  new  and  vital.  A new 
class  has  been  called  upon  to  fulfil  its  social  destiny.  The  energies, 
hopes  and  enthusiasms  of  this  class  have  been  for  the  first  time 
released  and  directed  toward  the  task  of  building  its  own  social 
ystem,  employing  both  science  and  technics,  and  applying  them 
all  phases  of  the  social  life.  The  result  is  an  unleashing  of  a 
uge  volume  of  feverish  activity  and  buoyant  optimism,  and  a 
social  effort  directed  toward  construction,  co-operation  and  peace, 
such  as  the  society  of  West  Europe  could  only  arouse  and  direct 
toward  the  objectives  of  war. 

Day  by  day,  month  by  month,  year  by  year,  the  two  social  sys- 
tems live  on,  side  by  side.  West  Europe  divided  and  torn  by 
bitter  economic,  political  and  military  conflicts,  is  growing  weaker. 
East  Europe,  united,  and  dedicated  to  the  task  of  building  a new 
world,  is  growing  stronger.  If  West  Europe,  before  it  is  too  late, 
could  rally  all  of  her  forces,  unite  them,  and  deal  a death-blow  to 
the  new  social  life  that  is  springing  up  in  East  Europe,  the  entire 
continent  might  sink  together  into  social  darkness.  If  West  Europe 
fails  to  strike  that  blow, — and  it  now  seems  improbable  that  she 
can  or  will  strike  it, — it  is  only  a question  of  time  before  the  pro- 
gressive weakening  in  the  West  and  the  steady  advance  in  the 
East  raises  the  eastern  culture  level  to  a point  from  which  this 
higher  culture  must  overflow  into  the  lower  culture  areas  of  West 
urope. 

Against  the  possibility  of  such  an  innundation,  the  ruling  classes 
f West  Europe  built  the  line  of  border  states  that  separate  Europe 
West  from  Europe  East.  Against  it  they  have  propagandized,  mis- 


€ 


m 

I 


54 


EUROPE— WEST  AND  EAST 


represented  and  lied  through  the  years  that  have  passed  since 
the  October  Revolution  of  1917.  Against  it  they  are  now  busy 
erecting  dykes  and  constructing  barriers,  hoping  thereby  to  ex- 
elude  the  new  life.  They  forget  that  behind  each  dyke  and  bar- 
rier,  and  within  each  national  frontier  are  the  workers,  farmers 
and  soldiers  who  organized  the  Russian  Soviets  in  1917,  the 
Bavarian  and  Hungarian  Soviets  in  1919,  and  the  Spanish  Soviets 
in  1934.  They  also  forget  that  these  workers,  farmers  and  soldiers, 
with  their  families,  make  up  the  vast  majority  of  a humanity  that 
seeks  unceasingly  to  raise  life  to  its  highest,  fullest,  most  complete 
expression. 


t 


PAMPHLETS  by  SCOTT  NEARING 


PRN  ABC  OF  COMMUNISM 


The  advance  from  capitalism  to  communism.  Transition. 
The  theory  and  practice  of  a workers’  world. 


EUROPE  — WEST  AND  EAST 

A report  on  the  general  crisis  of  capitalism.  The  movement 
from  economic  depression  to  fascism  and  the  war  prepara- 
tions of  Western  Europe,  compared  and  contrasted  with  the 
socialist  construction  in  the  Soviet  Union. 


ANOTHER  WORLD  WAR 

The  historical  background  of  previous  world  wars  and  of  the 
War  of  1914-18.  A parallel  between  the  conditions  preceding 
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Coming  Back 

The  American  people  are  coming  back.  Difficulties  assail 
them;  hard  times  oppress  them;  the  dissolution  of  Imperial 
Europe  terrifies  them;  the  war-time  orgy  fagged  them;  the 
dullness  of  peace  without  work  appals  them,  and  yet  they 
are  coming  back.  The  people  are  going  to  work,  where 
they  can  find  it;  they  are  cutting  down  their  expenditures 
to  meet  diminished  incomes;  they  are  accepting  the  new 
situation  and  continuing  their  lives  just  as  though  the  war 
had  not  upset  them  during  four  hectic  years.  To  be  sure 
there  are  some  who  will  never  come  back — old  people,  dis- 
appointed people,  broken  people,  to  whom  the  war  brought 
irretrievable  disaster;  but  the  twenty  odd  millions  of  children 
in  the  public  schools  are  taking  their  places,  millions  of 
them  each  year,  in  the  ranks  of  the  bread-winners;  and  beside 
them  are  the  other  millions  of  young,  energetic,  hopeful, 
ambitious  men  and  women  with  futures  to  carve  out,  homes 
to  make  and  families  to  support.  Life  is  beckoning  to  this 
multitude  and  the  multitude  is  rushing  out  to  meet  life. 

During  my  recent  trips  through  the  eastern,  western  and 
southern  sections  of  the  country,  I have  come  into  contact 

3 


with  all  kinds  of  people  in  all  types  of  industrial  districts. 
I have  met  them,  talked  with  them,  listened  to  their  stories 
and  have  come  away  with  some  pretty  clear  impressions. 

In  these  trips,  as  the  miles  have  flown  away  behind  me 
across  the  Alleghenies  and  out  upon  the  prairie,  I have  been 
impressed  first  of  all  by  the  fact  that  the  cities  and  towns 
stand  as  they  stood  in  1914,  with  the  same  wide  streets,  shaded 
by  the  same  elms  and  maples;  with  the  same  wooden  cottages 
set  back  behind  their  lawns;  with  the  same  blocks  of  brick 
or  stone  office  buildings  and  stores;  with  the  same  school 
buildings  and  stations  and  factories  and  libraries  and  court- 
houses dominating  the  architecture  of  the  clustering  commun- 
ity. Between  these  cities  and  towns  stretch  the  same  farms 
with  their  cosy  houses  and  their  big  barns  and  cattle-sheds, 
acre  after  acre,  fence-line  upon  fence-line. 

There  are  more  good  school  buildings  now  than  there 
were  before  the  World  War,  and  there  has  been  a vast 
improvement  in  the  grading  and  the  surfacing  of  many  of 
the  roads,  but,  with  these  exceptions,  and  with  the  further 
exception  of  a few  new  houses,  factories,  stations,  hotels  and 
office  buildings,  the  country  looks  just  as  it  did  in  1914. 


The  Farm 

The  farmers  are  sowing  their  winter  wheat;  harvesting 
their  corn;  taking  care  of  their  cattle  and  hogs.  There  is 
less  hired  help  because,  as  one  farmer  put  it,  “The  difference 
between  profit  and  loss  now-a-days  is  in  the  wages  of  the 
help  we  employ.”  Consequently  the  price  paid  for  husking 
corn  and  picking  potatoes  has  dropped  to  a small  fraction 
of  the  1919  figures,  and  the  farmer  has  taken  his  sons  and 


4 


daughters  and  his  wife  into  the  fields  to  do  their  own  work. 
What  they  cannot  do  themselves  they  leave  undone — it  is 
cheaper  that  way.  The  corn  is  being  burned  on  many  farms 
because  it  is  cheaper  than  coal,  and  it  stands  in  the  fields 
until  it  is  needed  for  the  stoves  and  furnaces. 

“I  am  feeling  tired,”  one  farmer  said.  “I  don’t  seem 
to  get  enough  rest.  There  are  the  cows  twice  a day,  and  the 
farm  work  and  the  chores.  I’ve  been  starting  around  four 
and  quitting  around  nine  or  ten  ever  since  spring,  and  going 
about  seven  days  out  of  the  week.”  His  story  is  that  of 
millions  who  have  been  afraid  to  hire  help  on  the  present 
low  markets  and  who,  instead,  have  undertaken  to  work  a 
sixteen-hour  day. 

Of  course  the  country  is  tired  after  the  war — tired  as 
a gambler  at  four  in  the  morning;  tired  as  a person  who  has 
had  a narrow  escape  in  a train  wreck,  and  who  has  worked 
feverishly  for  hours  to  drag  out  the  wounded  and  identify 
the  dead;  tired  as  a dreamer  who  has  devoted  himself  for 
days  to  the  pursuit  of  some  phantom  of  his  imagining.  And 
because  the  country  is  so  tired  it  is  a bit  stupid  and  sullen 
in  spots.  Yet  there  are  other  spots  where  the  tone  of  resent- 
ment is  loud  enough  to  wake  the  dozers.  On  the  whole, 
however,  it  is  the  grip  of  moral  inertia  that  is  most  pronounced. 
Fed  up  on  horrors  and  scandals,  the  people  turn  uneasily. 
Those  with  more  energy  and  courage  are  even  speaking  out 
loud,  and  denouncing  some  of  the  very  principles  which  a 
few  short  years  ago  constituted  the  core  of  civilization,  the 
goal  toward  which  all  good  citizens  and  loyal  Americans 
must  strive  on  peril  of  their  reputations,  if  not  of  their  lives. 

The  people  believe  that  the  United  States  won  the  war. 
To  deny  it  is  like  denying  the  self-evident  truths  of  nature. 


5 


Discontent 


Still  no  one  is  satisfied.  The  militarists  have  not  secured 
enough  militarism,  while  the  business  men  have  too  many 
taxes.  The  workers  are  overwhelmed  with  wage  cuts  and 
unemployment;  the  republicans  failed  to  get  the  prosperity 
for  which  16  millions  of  them  voted  in  November,  1920; 
certainly  the  most  ardent  democrat  can  hardly  contend  that 
the  war,  fathered  by  his  party,  has  made  the  world  safe  for 
democracy;  the  pacifists  did  not  get  peace,  nor  did  the 
Revolutionaries  get  world  revolution.  Only  the  profiteers 
passed  beyond  their  objectives,  and  even  they  are  grumbling 
when  they  are  called  upon  to  pay  their  income  taxes  of  one 
year  out  of  the  profits  (or  deficits)  of  the  next. 

The  United  States,  in  a word,  is  a disappointed,  grouchy 
country,  going  back  to  work.  It  is  a country  of  working 
people  who  had  the  feeling — last  night — that  to-day  would  be 
a holiday;  but  morning  has  dawned,  and  with  the  dawn, 
there  is  the  sound  of  the  six  o’clock  whistle. 

After  covering  the  first  thousand  miles  and  getting  as  far 
as  Chicago  or  St.  Louis,  the  traveller  begins  to  realize  that 
there  is  something  to  the  west  of  the  Alleghenies — black  land, 
railroads,  shops,  mines,  people.  After  covering  the  second 
thousand  miles  and  reaching  the  Rockies,  the  traveller  feels 
a secret  bond  of  sympathy  with  the  natives  when  they  speak 
of  New  York  as  though  it  were  a suburb  of  America  and 
of  Boston  as  though  it  were  an  outlying  village.  Here  in 
the  Mississippi  valley,  with  its  millions  of  rolling,  teeming 
acres,  lies  the  centre  of  the  Continent’s  future  civilization. 
This  is  America. 


6 


The  World  of  Business 

Business  is  bad  throughout  the  country  and  there  is  little 
indication  that  there  will  be  an  early  resumption. 

The  present  economic  system  is  so  organized  that  there 
must  be  a buyer  with  money  or  credit  in  his  hands,  before 
goods  are  produced  or  released  from  the  warehouses.  The 
streets  of  a city  may  be  filled  with  barefooted  children,  but 
no  shoes  will  be  made  until  the  children  get  money  with 
which  to  buy  them.  It  is  purchasing  power,  therefore,  that 
is  the  fuel  of  industry. 

Purchasing  power  in  the  United  States,  measured  in  money 
terms,  has  been  cut  nearly  in  two  during  the  past  two  years. 
The  resulting  devastation  in  the  business  world  may  easily 
be  imagined. 

A little  more  than  a tenth  of  the  products  turned  out  in 
the  United  States  is  sold  to  the  export  trade.  In  1920  Ameri- 
can exports  reached  the  unprecedented  figure  of  8,108  millions 
of  dollars.  For  the  fiscal  year  of  1921,  however,  exports 
fell  to  6,516  millions.* 

Demoralized  foreign  markets  and  adverse  exchange  rates 
together  with  the  world-wide  industrial  depression  are  reduc- 
ing the  export  trade  of  the  country  to  about  one-half  of  its 
1919  and  1920  values. 

Domestic  purchasing  power  is  being  likewise  curtailed. 

There  are  about  seven  millions  of  farmers  in  the  United 
States,  who,  with  their  families,  make  up  nearly  a third  of 


*The  figures  for  November,  1920  were  676  millions;  for  November, 
1921,  295  millions. 


7 


th©  entire  population.  The  income  of  the  farmer  depends 
upon  the  prices  that  he  can  get  for  his  crops.  Within  the 
past  two  years  the  prices  of  the  principal  farm  staples  have 
fallen  from  thirty  to  seventy  per  cent.* 

In  the  fall  and  winter  of  1921,  the  farmer  was  in  receipt 
of  less  than  one-half  the  income  that  he  received  during 
1919  or  1920. 

The  same  thing  has  happened  to  salary  and  wage-earners 
that  has  happened  to  the  farmers.  Wages  have  been  cut  in 
most  of  the  principal  industries  from  20  to  60  per  cent.  Men 
are  now  being  hired  for  work  in  the  steel  mills  at  30  cents 
per  hour  as  against  65  or  70  cents  two  years  ago.  In  Cleve- 
land and  other  mid-western  cities  the  unskilled  labor  rate 
has  fallen  to  $2  per  day.  Contractors  in  these  cities  are 
advertising  for  men  at  15  cents  per  hour.  In  the  Michigan 
potato  belt,  men  were  offered  as  little  as  a dollar  per  day 
and  board  to  pick  potatoes.  Where  the  depression  is  most 
severe,  wages  in  many  cases  are  already  below  the  1913 
level. 


Unemployment 

But  this  is  only  one-half  of  the  picture. 

The  wage  rates  have  fallen.  So  have  the  number  of 
working  hours  per  week.  There  is  some  dispute  as  to  the 
facts,  but  the  number  of  unemployed  is  variously  estimated 
at  from  3,750,000  to  5,700,000,  while  millions  more  — the 

* Cattle  which  sold  in  July,  1920,  for  $16  per  hundred  pounds, 
were  worth  but  $7  a year  and  a half  later,  while,  during  the  same  period, 
corn  dropped  from  $1.50  to  50  cents,  wheat,  from  $2.95  to  $1.15  and 
cotton,  from  39  cents  to  18  cents  in  spite  of  the  loss  of  half  the  crop. 

3 


miners,  for  example, — are  working  only  three  or  four  days 

per  week. 

Again,  as  with  the  farmers,  incomes  among  the  thirty- 
five  millions  of  wage  and  salary  earners  have  fallen  pre- 
cipitately, while  the  number  of  totally  unemployed  is  from 
three  to  five  times  as  great  as  it  was  in  the  summer  of  1929. 

These  reductions  in  incomes  have  been  somewhat  offset 
by  the  reductions  in  prices.  Wholesale  prices  are  off  per- 
haps fifty  per  cent,  but  are  still  above  the  pre-war  level, 
while  the  course  of  retail  prices  is  slowly  downward. 

Here,  then,  is  the  business  situation.  In  a business  com- 
munity where  prosperity  depends  upon  purchasing  power, 
there  have  been  slashing  cuts  in  incomes  without  any  cor- 
responding reductions  in  prices. 

The  situation  is  having  its  effect  on  the  number  of  business 
failures,  which  rose  from  6,451  in  1919  and  8,881  in  1920, 
to  an  average  of  over  1500  failures  per  month  for  the  first 
eleven  months  of  1921.* 

Many  experts  are  taking  a gloomy  view  of  the  situation. 
Mr.  W.  P.  G.  Harding,  Governor  of  the  Federal  Reserve  Board, 
wrote,  in  an  article  published  September  28,  1921:  “All 

history  shows  that  periods  of  prosperity  and  depression  come 
in  cycles,  the  rotation  being  about  as  follows:  (1)  Prosperity, 
(2)  Liquidation,  (3)  Stagnation,  and  (4)  Revival.  At  the 
present  time  the  process  of  liquidation  is  well  advanced.” 
There  remain  the  periods  of  stagnation  and  of  revival  that 
may  stretch  away  for  years  into  the  future. 

All  of  these  facts  are  known  to  the  well  informed  business 


*In  November,  1919,  there  were  551  failures;  in  November,  1920, 
there  were  1,050  failures,  and  in  November,  1921,  there  were  1,988 
failures. 


9 


men  of  the  country,  and  yet  they  are  generally  optimistic. 
It  was  during  October,  1921,  that  Mr.  Charles  M.  Schwab 
spoke  before  a group  of  Chicago  men  and  advised  them  that 
the  best  thing  to  do  was  to  smile.  Generally  speaking,  they 
seem  to  be  following  his  advice.  Even  when  the  smile  becomes 
a grin,  they  continue  to  wear  it  with  undaunted  vigor. 


4 1 The  Essential  Government” 

The  chambers  of  commerce  throughout  the  country  are 
acting  as  they  learned  to  act  during  the  war.  In  those  days 
of  national  emergency,  the  leading  business  men  of  each 
community  took  charge  of  the  important  work  to  be  done, 
just  as  though  they  had  been  duly  elected  to  public  office. 
The  war  is  over,  but  the  habit  lingers,  and  the  leading  mem- 
bers of  the  chamber  of  commerce  and  the  board  of  trade 
continue  to  take  themselves  and  their  work  as  seriously  as 
they  did  during  the  war,  and  to  function  as  the  essential 
government.  In  Kansas  City,  the  Chamber  of  Commerce  has 
recently  issued  its  annual  report  to  the  people  of  the  city. 
The  papers  gave  the  report  columns  of  space,  and  well  they 
might,  for  it  dealt  with  the  most  important  and  vital  questions 
before  the  city  in  a more  authoritative  manner  than  the  mayor 
and  council  would  ordinarily  assume. 

There  are  cities  like  Toledo  and  Massillon,  where  an 
election  fight  has  recently  been  waged  on  this  very  issue — the 
Chamber  of  Commerce  versus  the  remainder  of  the  community. 
Such  opposition  is  rare,  however.  In  the  average  town,  the 
chamber  of  commerce  acts  as  though  it  were  the  official  guardi- 
an of  the  community,  and  the  citizens  respond  as  though 
they  agreed  with  this  assumption. 

10 


Little  business  men  are  hustling  for  business.  The  laundry- 
men,  grocers,  vegetable  dealers  and  bakers  are  once  more  get- 
ting acquainted  with  the  babies  of  their  customers.  The  high- 
handedness that  characterized  the  period  of  the  war  has  been 
replaced  by  the  suavity  of  peace.  Even  the  hotel  clerks  feel 
the  pressure  of  the  new  situation. 

During  the  war  it  was  as  much  as  a man’s  temper  was 
worth  to  attract  the  attention  of  a hotel  clerk  long  enough  to 
be  told  that  the  house  was  full-up.  Now,  and  particularly 
in  the  smaller  hotels,  the  clerks  have  taken  off  their  frock 
coats  and  put  on  jumpers. 

“So  you  want  a double  room,”  said  the  clerk  in  a Dayton 
Hotel  to  two  young  chaps  who  had  just  come  in.  Then  he 
mentioned  prices. 

The  young  men  demurred.  The  clerk  quoted  a lower 
figure.  “Take  it  for  a week,”  he  said,  “and  I can  do  still 
better — and  it’s  a nice  room.” 

“All  right,”  said  the  spokesman,  “let’s  see  the  room.” 

“Sure,”  from  the  clerk,  “that’s  what  I’m  here  for.”  He 
ii cached  for  the  key  adding,  “Have  a cigar?”,  as  two  very 
decent  looking  ones  slid  across  the  counter  to  the  prospective 
customers. 

Customers  are  scarce  in  every  line.  Business  is  hard  to 
get, — so  hard  that  even  the  hotel  clerks  are  acting  as  though 
they  were  only  human  money  grubbers  after  all. 

The  World  of  Labor 

The  same  catastrophe  which  has  bowled  over  the  prosper- 
ity of  the  world  of  business  has  played  havoc  with  the  world 
of  labor.  How  could  it  be  otherwise  when  the  world  of 


II 


labor  depends  upon  the  world  of  business  for  the  opportunity 
tc  earn  its  daily  bread? 

The  farmers — a third  of  the  workers  of  the  country — 
must  pay  high  prices  for  the  things  that  they  buy,  while  they 
are  offered  low  prices  for  the  goods  that  they  have  to  sell. 
The  result  is  that  they  are  storing  their  grain,  as  far  as  they 
can,  in  anticipation  of  a rise  in  price,  while,  as  one  of  them 
put  it,  “We  do  not  go  to  town  because  we  are  afraid  we  might 
see  something  that  we  would  want  to  buy.”  So  the  rural 
towns  are  dead,  while  the  farmer,  dismissing  the  hired  man, 
goes  out  into  the  field  to  husk  his  own  corn — perhaps  for  the 
elevator;  perhaps  for  the  stove. 

The  industrial  workers  are  equally  hard  hit.  Unemploy- 
ment, as  has  been  stated,  is  rife  everywhere,  but  particularly 
in  those  regions  which  depend  for  their  industrial  activity 
upon  the  demand  for  some  form  of  machinery — engines,  auto- 
mobiles, farm  equipment  and  the  like.  At  all  points  there 
have  been  wage-cuts,  and  part-time  work  is  quite  general  in 
all  of  the  important  industries.  Rents  have  not  decreased 
greatly.  Prices  are  reduced  on  some  articles,  but  for  the  most 
part  the  worker  is  living  on  a far  lower  income  level  than 
that  of  the  past  few  years. 

There  was  a characteristic  situation  in  Cleveland  where  I 
went  to  speak  for  a church  forum.  The  Sunday  that  I was 
there  the  Cleveland  Plain  Dealer  contained  two  pages  of  ads., 
listing  houses  and  apartments  for  rent.  Men  were  taking 
jobs  at  two  dollars  a day,  and  there  were  advertisements  for 
labor  at  fifteen  cents  an  hour.  “Are  many  of  the  men  in  your 
church  out  of  work?”,  I asked  the  man  in  charge  of  the  forum. 
“We  have  fifteen  trustees,”  he  replied.  “At  the  moment,  eleven 
of  them  are  looking  for  jobs.”  In  a neighboring  town  I talked 
with  a mechanic  who  had  had  eleven  weeks  of  work  in  the 


12 


past  ten  months.  He  had  invested  his  last  six  dollars  in  silk 
stockings  which  he  proposed  to  sell  “among  the  swells”. 

In  some  of  the  smaller  industrial  cities  visited  during  my 
trips  there  was  no  factory  or  shop  running  on  full  time,  and 
in  some,  none  of  the  important  plants  were  running  at  all. 
In  these  places  the  outlook  was  as  dark  as  it  had  been  at  any 
time  in  their  history,  and  yet  the  attitude  of  the  men  was 
the  same  everywhere. 

“Yes,”  said  a machinist  in  a town  on  the  Mississippi,  “all 
three  of  the  shops  here  are  closed  at  the  moment,  but  they 
are  going  to  open  up  again  in  a couple  of  months.  Wages 
must  come  down,  I suppose.  They  are  already  cut  nearly 

in  half.” 

The  air  was  full  of  promises  of  resumption.  In  many 
instances,  the  resumption  was  scheduled  to  take  place  as 
soon  as  the  men  were  willing  to  accept  the  posted  reductions 
in  wages  together  with  the  open  shop.  There  were  no  strikes 
in  progress — just  a tacit  agreement  to  try  it  out  and  see  who 
could  stand  it  the  longest. 

“No,  I don’t  look  for  any  wage  cut,”  said  a conductor  on 

the  Santa  Fe. 

“Yes,  we  are  running  light  to-night,”  he  replied  in  answer 
to  a question.  “If  this  is  all  the  business  we  do  on  these 
through  trains,  what  must  it  be  like  on  the  smaller  roads! 
Things  will  pick  up  though.” 

The  same  tone  of  optimism  prevades  the  labor  world  that 
is  to  be  found  in  the  business  world.  “This  thing  will  hardly 
last  more  than  six  months,”  they  say. 


13 


Trade  Unions 


Meanwhile  there  is  a heavy  loss  in  the  union  membership.* 
The  opinion  among  the  union  officials  seemed  to  be  that  the 
unions  were  losing  their  war-time  gains.  The  unions  are  still 
thinking  in  terms  of  craft  organization  and  internal  politics. 
Their  loudest  utterance  is  a hunger  cry,  and  their  watchword, 
in  a pinch, — “I  won’t  play”. 

The  Santa  Fe  conductor  was  discussing  the  rail  strike. 
“I  never  could  see  what  interest  we  have  in  their  affairs  any- 
way,” he  said,  referring  to  the  trainmen.  “Let  them  fight  their 
own  battles.” 

The  war  has  come  and  the  war  has  gone,  but  the  labor 
organizations  of  the  United  States  are  still  the  labor  organiza- 
tions of  the  United  States — the  same  yesterday,  today,  and, 
so  some  of  them  seem  to  believe,  forever. 

Of  course  there  are  the  radical  members  and  the  radical 
officials,  who,  like  Howat  of  the  Miners,  are  willing  to  go  to 
the  mat  on  what  they  believe  to  be  their  rights.  But  they  are 
few  and  far  between,  at  least  in  the  realm  of  officialdom. 
That  was  pretty  clearly  demonstrated  in  the  case  of  Howat — 
voted  down  in  the  Miners  Convention;  later  deposed  by  Lewis 
as  President  of  the  Kansas  District,  all  the  time  that  he  was 
under  sentence,  and  after  the  convention,  actually  in  prison 
for  the  crime  of  calling  a strike. 

I stopped  for  a day  at  Columbus,  Kansas,  during  one  of  my 

*In  one  city  where  the  industries  were  fairly  stable,  the  membership 
in  the  machinists  union  at  the  time  of  my  visit  had  dropped  from  1300 
to  600.  In  some  of  the  Ohio  automobile  towns,  the  membership  in 
the  same  union  had  fallen  to  a fifth  of  its  1920  proportions. 

14 


trips,  and  made  an  effort  to  see  Howat.  But  the  day  that  I 
had  happened  to  strike  town  was  not  a visiting  day,  and  I 
might  as  well  have  tried  to  see  the  Emperor  of  Japan.  The 
business  men  of  Columbus  regarded  Howat  as  they  might  a 
wild  beast.  The  miners  of  the  neighboring  coal  fields  were 
with  him,  but  the  strikes  called  as  a protest  against  his  im- 
prisonment seemed  to  be  petering  out.  The  strong  arm  of  the 
state  had  him,  and  what  could  a handful  of  workers  do  against 
a State? 


The  State 

That  new  attitude  is  growing  very  fast.  It  was  first  stated 
by  Lewis,  when  he  referred  to  the  Federal  Injunction  against 
the  coal  miners  with  the  remark  that  they  could  not  fight 
against  the  government.  The  railroad  workers  made  the  same 
answer  during  the  negotiations  in  October  and  November, 
1921.  Even  the  oil  workers  of  Southern  California,  after 
seventeen  weeks  of  strike,  replied  to  a message  from  the 
United  States  Secretary  of  Labor  (who  is  a banker),  “Even 
a suggestion  from  the  Government  will  be  respected.” 

During  the  war  the  great  god  State  got  a foothold  in  the 
country  and  secured  so  firm  a grip  on  the  imaginations  of  the 
people  that  even  the  miners  and  the  railroaders  take  off  their 
hats  at  the  mere  mention  of  its  name. 

The  living  standards  of  the  workers  are  being  steadily 
beaten  down  through  unemployment,  wage-cuts,  and  short 
time.  Union  membership  is  dwindling.  The  open  shop  cam- 
paign, carried  on  in  all  parts  of  the  country,  has  resulted  in 
the  disruption  of  more  than  one  organization.  What  the 
chambers  of  commerce  did  not  do  through  their  publicity 

15 


and  the  activity  of  their  industrial  spies,  the  state  and  federal 
governments  have  done  through  the  use  of  the  constabulary 
and  the  injunction.  The  workers  still  cling  to  their  craft 
organizations,  and  hope  that  things  will  pick  up  after  the 
wage-cuts  are  all  made.  The  wTorld  of  labor  is  organized  less 
than  twenty  per  cent;  the  world  of  business  is  organized 
about  ninety  per  cent,  and  the  members  of  the  rival  organiza- 
tions think  and  act  accordingly. 


Radicalism 

Radicalism  is  about  as  much  at  home  in  the  middle  west 
as  a rubber  tree  is  at  home  on  the  Dakota  prairies — not  because 
of  the  American  Legion  and  the  Ku  Klux  Klan.  It  simply 
doesn’t  belong. 

Of  course  there  are  exceptions  to  this  general  rule,  but 
the  attitude  of  the  people  is  summed  up  in  the  one  word 
“Aquiescence”. 

I picked  the  word  up  in  Texas,  on  the  last  train  that  ran 
over  the  International  and  Great  Western  before  the  strike 
of  the  trainmen  took  place.  The  situation  was  rather  tense, 
and  I was  trying  to  get  a correct  view  of  the  motives  that  lay 
back  of  the  strike,  so  I spent  a great  deal  of  time  talking 
to  the  railroad  men  that  I met.  All  were  guarded.  In  fact, 
no  one  in  Texas  discusses  public  questions  above  a stage 
whisper.  Finally  I found  the  brakemen  of  our  train  sitting 
in  the  smoking  car,  so  I sat  down  beside  him  and  asked  him 
why  the  trainmen  were  going  out  before  the  rest  of  the  crafts. 

The  trainman  turned  to  me  and  said:  “Friend,  there  is 
a law  on  the  books  of  Texas  called  the  Open  Port  Law.  It 
was  passed  during  the  big  dock  strike  last  year.  Under 

16 


that  law,  if  we  talk  over  the  strike  in  a public  place,  we  are 
both  liable  to  be  sent  to  jail  for  conspiracy.” 

The  man  was  about  thirty.  His  face  was  keen,  and  he 
spoke  with  a precision  that  showed  a grasp  of  the  thing  that 
he  was  talking  about  so  I decided  to  go  on  with  the  conversa- 
tion. 

“I  am  a newspaper  man,”  I told  him,  “so  I want  to  get 
a straight  story  on  the  strike.”  i showed  him  my  press-card. 

He  read  the  card  carefully  and  examined  it  to  see  whether 
it  was  genuine.  Then  he  asked,  “Do  you  write  for  the  New 
York  CWZ?”  I told  him  that  I did.  “That  is  where  I have 
seen  your  name,”  he  said.  “Well,  I am  glad  to  meet  you,” 
and  we  shook  hands.  A revolutions!  carrying  T.  N.  T.'  could 
scarcely  have  proceeded  more  cautiously  in  an  identification 
than  did  these  two  Americans  before  they  could  talk  about 
the  one  subject  that  was  the  common  topic  of  conversation  in 
that  community. 

Having  satisfied  himself  that  I was  neither  a government 
agent  nor  a company  spy,  the  trainman  talked  freely  about 
the  causes  of  the  strike,  which  he  understood  very  well.  He 
was  a little  ill  at  ease  while  we  were  talking.  Although  we 
were  sitting  at  one  end  of  an  almost  empty  car,  he  kept  turn- 
ing to  see  that  no  one  was  coming  up  from  behind.  After 
giving  an  excellent  picture  of  the  strike  situation,  and  scoring 
the  railroad  men  for  their  failure  to  develop  a feeling  of 
solidarity  higher  than  their  feelings  of  craft,  he  described  his 
personal  life.  He  had  been  a Socialist  for  many  years,  and 
bad  taken  an  active  part  in  an  effort  to  start  a radical  paper 
in  San  Antonio.  Then  the  war  struck  the  country,  playing 
havoc  with  his  plans.  At  about  the  same  time,  his  wife  was 
taken  sick  and  she  had  since  remained  in  delicate  health. 

“I  have  learned  that  acquiescence  is  a great  word,”  he  said. 

17 


“I  acquiesce.  Of  course  I don’t  believe  in  what  is  going  on, 
but  what  can  one  man  or  a handful  do  against  the  whole 
town,  backed  by  the  power  of  the  state  and  the  business  in- 
terests? If  you  have  ideas  and  express  them,  you’re  just 
bound  to  get  into  trouble,  and  in  my  present  position,  with  a 
sick  wife  on  my  hands,  I can’t  afford  trouble,  so  I acquiesce.” 

Radicalism,  through  the  middle  west,  is  generally  acquies- 
cent. The  members  of  the  I.  W.  W.  still  have  their  say,  and 
there  are  men  and  a few  women,  here  and  there,  most  of  whom 
were  trained  in  the  pre-war  days,  who  still  speak  their  minds 
and  hold  up  their  heads,  but  the  younger  radicals  learned, 
during  the  war,  to  keep  their  mouths  shut  and  acquiesce. 

This  does  not  mean  that  people  are  not  thinking  radically. 
The  country  is  full  of  men  and  women  who  see  what  is  going 
on,  and  who  are  bitterly  opposed  to  it,  but  when  it  comes 
to  joining  a radical  organization,  subscribing  to  a radical 
paper,  or  even  going  to  a radical  meeting,  they  think  twice, 
and  then  usually  acquiesce. 

In  Leavenworth 

The  sanest  spirit  that  1 found  was  that  of  the  men  with 
whom  I spoke  in  the  Federal  Penitentiary  at  Leavenworth.  They 
have  not  abated  their  zeal;  their  vision  is  as  keen  as  ever, 
but  they  realize  that  the  tactics  of  1912  will  not  win  points 
in  the  next  decade.  They  face  five,  ten,  twenty  years  in  the 
penitentiary,  but  they  are  bright,  hopeful,  and  dead  in  earnest. 

The  radicalism  in  the  middle  west  is  under  men’s  hats. 
How  much  is  there  of  it?  No  one  can  say.  When  chance 
gives  an  opening,  one  finds  it  on  all  sides,  but  to  date  it 
remains  acquiescent.  Meanwhile,  the  business  interests  and 

18 


their  representatives  are  doing  everything  in  their  power  to 
muzzle  it  and  destroy  it. 


The  Great  Event 

Radicalism  does  not  find  a congenial  atmosphere  in  the 
valley  of  the  Mississippi.  Labor  is  being  broken  by  the 
ferocious  attacks  of  the  business  interests.  There  is  a tacit 
understanding,  almost  everywhere,  that  the  chambers  of  com- 
merce and  the  board  of  trade  are,  for  the  time  being  at  least, 
the  guardians  of  private  as  well  as  of  public  morality.  These 
facts  stand  out  against  the  background  of  hard  times  that 
one  meets  on  the  farm  as  well  as  in  the  town,  but  they’are 
not  the  great  event  of  the  fall  of  the  year. 

It  was  in  Springfield,  Ohio,  that  I learned  where  the  heart 
of  America  is  during  lovely  autumn  days.  We  were  having 
very  fair  success  in  many  of  the  towns — it  was  no  uncommon 
thing  to  have  five  hundred  people  attend  a meeting  and  stay 
to  a discussion  of  the  economic  situation  or  disarmament.  But 
at  Springfield  there  were  not  five  hundred,  but  five  thousand, 
people — packed  in  the  street,  from  curb  to  curb,  standing 
on  tip-toe,  craning  their  necks  before  a base-ball  score  board. 

Babe  Ruth  was  at  bat.  First  the  pitcher  threw  a ball; 
then  two  strikes  came  in  quick  succession.  These  were  suc- 
ceeded by  another  ball,  and  yet  another.  The  record  stood 
three  balls  and  two  strikes.  There  was  a general  shifting  of 
feet  as  the  crowd  pressed  a step  nearer  to  the  score-board. 
The  pitcher  came  into  action  again— it  was  a ball!  Babe 
Ruth  walked,  and  the  crowd  groaned  aloud.  Babe  had  failed 
to  hit  a homer — an  incomparable  catastrophe,  beside  which 

19 


the  economic  depression  and  the  failure  of  the  unemployment 
conference  was  as  dust  in  the  balance. 

Then  it  was  that  the  fact  struck  me  with  full  force:  I was 
dealing  with  boys!  This  close-pressed  mass  of  five  thouand 
—multiplied  again  and  again  in  all  the  principal  cities  and 
towns  of  the  country — was  a crowd  of  boys  lost  in  the  contem- 
plation of  one  of  their  favorite  amusements.  I saw  and  under- 
stood that  these  millions  were  more  interested  in  the  outcome 
of  a base-ball  game  than  they  were  in  the  outcome  of  an 
Unemployment  Conference  or  of  an  Arms  Conference.  They 
were  more  interested  because  base-ball  was  closer  to  them 
than  either  unemployment  or  war. 

The  impression  was  heightened  as  I went  farther  west  on 
one  of  my  trips.  In  St.  Louis,  base-ball  was  the  principal 
topic  of  conversation.  In  Denver,  the  base-ball  score  was 
spread  across  the  top  of  the  evening  papers  in  streaming 
headlines  which  forced  the  local  scandal  and  suicide  into  an 
insignificant  position.  Here,  two  thousand  miles  from  the 
scene  of  the  game,  the  newsboys  were  shouting,  “Extra!  Extra! 
Final  Score!”  with  the  same  energy  and  with  the  same  results 
in  increased  sales  that  they  would  have  met  with  in  the  east. 

When  our  train  was  passing  through  Watrous,  New  Mexico, 
at  one  o’clock  in  the  afternoon,  the  conductor  ran  into  the 
tiny  station  and  then  hurried  back  into  the  smoking-car  with 
the  announcement:  “ The  Giants  are  ahead,  boys.  Two  home 
runs.  The  agent  was  cut  off  and  couldn’t  get  the  complete 
message,  but  it  is  the  end  of  the  third.” 

In  an  instant  the  car  was  a hive,  humming  with  a discussion 
of  the  possibilities  that  the  next  six  innings  might  hold. 
One  weather-beaten  miner,  after  threshing  out  the  question 
v/ith  his  companion,  leaned  back  in  his  seat.  “I  sure  would 
like  to  see  that  game,”  he  sighed. 

20 


This  was  not  a mob,  gorged  with  the  blood-letting  of  an 
arena,  nor  the  clamorous  multitude  whooping  at  the  heels 
of  a toreador.  It  was  an  aggregation  of  sportsmen,  analyzing, 
comparing,  attacking,  defending,  watching  each  play,  hanging 
breathless  over  the  newspaper  stories,  intelligent,  well-in- 
formed, enjoying  to  the  uttermost  one  of  the  most  momentous 
events  of  the  whole  year. 

Between  the  games,  these  men  found  many  things  to  interest 
them.  There  were  the  thrilling  news-stories,  the  sensations 
that  occupied  the  headlines,  the  propaganda  against  Russia 
and  Germany  which  still  holds  so  prominent  a place  in  the 
dailies  of  the  smaller  cities,  and,  above  all,  there  were  the 
sports,  which  have  come  to  their  own  as  the  life  of  the  news- 
papers. Then,  with  each  Sunday,  there  appeared  the  funnies 
— Mutt  and  Jeff,  the  Gumps,  Bringing  Up  Father.  All  across 
the  continent  these  famous  characters  cut  their  weekly  caper 
for  the  benefit  of  multitudes. 

The  chief  substitute  for  the  excitement  of  the  World’s 
Series  games  was  provided  by  the  movies.  Charlie  Chaplin, 
with  his  antics;  Mary  Pickford — embodiment  of  innocence  and 
virtue — and  Douglas  Fairbanks  with  his  athletics  captivate  and 
please  their  tens  of  millions. 

Base-ball,  press-stunts,  film-stars — here  was  the  nation’s 
centre  of  attention;  its  lode-star.  Cranks  and  theorists  might 
look  elsewhere,  but  the  masses  of  the  people  turned  here  for 
consolation. 

Yet  here  was  nothing  that  was  degenerate  and  little  that 
was  coarse.  Horse-play,  movement,  innocence,  virtue,  beauty, 
strength,  skill,  courage,  the  triumph  of  the  right— making 
their  appeal  to  health  and  to  youth. 


21 


Childhood 


This,  then,  was  the  American  people — an  embodiment  of 
healthy,  vigorous,  normal  childhood.  And  this  explained  so 
much ! 

The  American  worker  had  gone  along  his  path  of  daily 
duty,  innocently  enough,  while  the  profiteers  took  the  forests, 
the  coal,  the  iron,  the  copper,  the  railroads,  the  water-falls, 
lie  had  made  only  a faint  protest  when  he  was  told  that  the 
same  piratical  bands  were  making  away  with  the  railroads, 
the  power-supply  sites,  the  street  railway  and  other  public 
franchises.  He  never  became  much  interested  in  the  subject 
of  money  and  banking— it  was  too  involved;  and  as  for  the 
problems  of  international  finance,  they  were  far  beyond  him. 
He  was  so  unused  to  the  world  that  he  did  not  even  take  the 
trouble  to  join  hands  with  his  fellows,  but  was  content  to 
remain  unorganized  or  to  belong  to  a craft  union  that  was 
as  separate  from  the  other  craft  unions  as  though  they  lived 
and  worked  on  separate  continents.  He  was  quite  willing 
to  permit  the  politicians  and  the  lawyers  to  represent  him 
in  public  affairs,  and  to  tell  him  how  to  vote.  Indeed,  in  the 
elections  of  1920  he  had  voted  sixteen  millions  strong  for 
Harding,  with  another  nine  millions  for  Cox,  on  the  supposi- 
tion that  one  of  these  men — both  of  whom  were  backed  by 
powerful  business  interests — would  get  him  out  of  his  scrapes. 
The  American  worker  had  been  led  into  bondage,  into  war 
and  back  into  bondage  again,  without  knowing  where  he  was 
going  or  why.  He  had  been  led  very  much  as  a teacher  leads 
children  about  an  elementary  school. 

What  were  the  dominant  characteristics  of  these  men  and 


22 


women?  Ignorance,  innocence,  a love  of  play  and  adventure, 
a desire  to  “do”  things  and  people, — the  outstanding  charac- 
teristics of  childhood. 

No  wise  teacher  goes  into  an  elementary  class  with  a prob- 
lem in  geometry  and  asks  the  children  to  solve  it.  Still  less 
does  he  get  cross  if  they  fail  in  its  solution.  Yet  here  was  a 
little  band  of  revolutionaries,  radicals,  reformers,  presenting  to 
the  American  people  some  of  the  most  complicated  social 
theories  that  the  human  mind  has  ever  evolved,  and  exasperat- 
ed beyond  measure  when  the  people  failed  to  grasp  the  import 
of  the  theories  or  to  act  on  their  implications. 

Why  had  the  Socialists  and  the  Communists  and  the  In- 
dustrial Workers  of  the  World  been  able  to  enroll  a mem- 
bership of  less  than  two  hundred  thousand  in  a population  of 
a hundred  million  after  years  of  effort?  Either  because  the 
radicals  were  wrong  in  their  theories  or  because  they  were 
trying  to  teach  geometry  in  the  elementary  grades.  The  latter 
seems  to  be  the  correct  explanation. 

A comprehension  of  any  social  theory  involves  two  things: 
first,  a reasonable  freedom  from  prejudices  and  pre-concep- 
tions,— that  is,  an  open  mind;  second,  the  ability  to  think  in 
abstract  terms  and  to  become  convinced  of  the  practicability 
of  something  that  is  not  immediately  possible.  Neither  of 
these  things  is  possible  to  a person  who  is  accustomed  to  see 
life  through  base-ball  scores  and  movie  films. 

The  conclusion  of  the  whole  matter  is  obvious — those  who 
wish  to  reach  the  American  people  and  give  them  a concep- 
tion of  the  problems  that  are  before  them  must  organize  an 
elementary  school  and  teach  in  an  elementary  way. 


23 


An  Elementary  School 


The  American  people  have  their  education  in  public  affairs 
still  before  them.  Intellectually  they  are  no  more  backward 
than  the  people  of  any  of  the  great  countries  of  Europe.  Their 
reactions  are  the  normal  reactions  of  early  life — of  childhood. 
They  are  sound,  healthy  and  ignorant  of  economics,  sociology 
and  political  science.  They  have  learned  how  to  produce 
goods  but  they  have  never  learned  how  to  distribute  them, 
nor  have  they  learned  that  the  end  of  all  state-craft  is  the 
advancement  of  community  well-being. 

There  are  two  ways  in  which  the  American  people  may 
secure  the  knowledge  of  public  matters  of  which  they  are  in 
such  great  need.  One  is  through  experience;  the  other  is 
through  education.  The  path  of  experience  is  hard.  The 
method  of  experience  is  the  most  expensive  method  of  gaining 
knowledge.  Education  consists  in  imparting  the  collected 
experiences  of  the  race  to  the  new  generation.  This  is  the 
cheapest  and  most  efficient  means  for  the  spreading  of  knowl- 
edge. 

There  are  many  radicals  who  look  with  alarm  on  the 
path  that  America  is  treading — the  path  of  imperialism,  con- 
quest, militarism.  They  are  convinced  that  this  path  leads 
finally  to  the  destruction  of  the  nations  that  practice  it.  They 
are  eager  to  do  something  that  will  head  off  the  policy  before 
it  is  too  late.  How  shall  they  act? 

On  the  one  hand,  they  may  throw  up  their  hands  and  say, 
“Let  the  dubbs  go!  They  will  learn  in  time.  A little  more 
starvation  and  another  war  will  teach  them.  There  is  no 
other  way!” 


24 


This  is  reliance  on  experience — the  most  expensive  method 
of  securing  knowledge.  Furthermore  it  is  a confession  that 
all  of  the  elaborate  means  of  education  and  propaganda  that 
have  been  developed  over  thousands  of  years  amount  to 
nothing.  Did  the  German  children  learn  nothing  about  the 
greatness  of  the  Fatherland?  Were  the  American  papers 
totally  ineffective  in  convincing  the  people  that  this  country 
should  enter  the  war  in  1917?  Does  not  all  the  recent  ex- 
perience and  the  ancient  experience  of  the  race,  too,  show 
that  the  spoken  and  written  word,  the  picture  and  the 
drama  (if  they  are  spoken  and  written  effectively  enough 
and  often  enough)  have  immense  power  over  the  minds  of 
men?  It  was  not  necessary  for  the  ruling  class  in  the  United 
States  to  wait  until  German  armies  were  on  the  Atlantic 
coast  to  convince  the  American  people  that  something  must 
be  done.  So  it  is  not  necssary  for  the  radical  to  wait  till  hell 
breaks  loose  again  to  convince  the  American  people  that  their 
welfare  lies  in  a fundamental  change  in  their  economic  and 
political  ideas  and  institutions.  In  fact,  there  are  already  tens 
of  thousands  of  men  and  women,— particularly  among  the 
younger  people— who  are  asking:  “Where  can  I get  a job 

that  will  let  me  earn  a living  and  at  the  same  time  retain 
my  self-respect?”  or  “What  can  I do  to  further  the  cause  of 
fundamental  economic  and  social  change?”  or  “Is  there  any 
place  in  the  labor  movement  where  I can  work  for  the  future 
and  at  the  same  time  make  a living?’ ’ 


The  Task  Ahead 

There  must  be  some  answer  to  these  eager  ones, — specific 
tasks  ennumerated ; assignment  to  definite  fields  of  activity; 

25 


training,  in  labor  schools  and  colleges,  for  regular  work  in 
the  forward-looking  movements.  Some  of  these  people  are 
just  graduating  from  college.  Others  are  trained  technicians. 
All  are  needed  in  the  building  of  the  new  society. 

This  is  a specialized  task  that  is  being  undertaken  through 
workers’  education  and  the  agencies  for  the  placing  of  radicals 
at  the  stragetic  posts  of  the  labor  movement. 

There  remains  the  great  task  of  reaching  the  masses  of 
the  people, — the  millions  who  read  the  papers,  see  the  movies, 
watch  the  base-ball  scores  and  do  the  world’s  work.  Here 
there  are  two  general  methods  of  approach — through  organ- 
ization or  through  propaganda.  The  two  are  usually  combined 
in  some  degree. 

Organizations  are  of  five  main  kinds, — organizations  of 
producers  on  the  job;  co-operative  organizations  of  producers 
or  of  consumers;  political  organizations;  propaganda  organ- 
izations; mutual  benefit  organizations.  All  five  of  these  types 
of  organizations  exist  in  some  stage  of  development  in  most 
of  the  population  centres  of  the  United  States.  The  work  has 
been  begun.  The  initial  steps  have  been  taken.  There  remains 
the  task  of  strengthening  these  organizations  numerically  and 
of  shaping  their  policies  away  from  a blind  acceptance  of  the 
past  to  a purposeful  molding  of  the  future. 

This  work  can  be  done  by  those  who  belong  to  the  organ- 
izations in  question,  and  by  no  one  else,  unless  it  is  proposed 
to  build  a whole  new  and  dual  structure  of  organizations. 
And  if  those  in  the  existing  organizations  come  into  the  new 
ones,  the  latter  will  be  as  conservative  as  the  old  groups.  No 
organization  can  long  continue  to  express  a point  of  view 
that  is  not  accepted  by  its  membership — particularly  if  the 
organization  is  a voluntary  one.  The  trouble  with  the  organ- 
izations of  the  labor  movement  in  the  United  States  is  that 


26 


their  membership  is  made  up  of  the  rank  and  file  of  the 
American  people— a rank  and  file  that  is  both  conservative 
and  uninformed. 

Information  will  be  imparted  most  readily  through  the 
existing  channels  of  organization.  New  organizations  will 
spring  up,  but  the  bulk  of  the  people  remain  in  the  old  ones 
and,  if  they  are  to  be  reached  anywhere,  it  will  be  in  the 
organizations  of  which  they  are  already  members. 

The  second  field  is  that  of  education  or  propaganda,  and 
it  is  in  this  field  that  the  important  work  of  the  immediate 
future  lies.  The  rank  and  file  of  the  American  poeple  cannot 
be  expected  to  join  organizations  of  the  labor  movement  until 
they  find  out  why.  The  purpose  of  propaganda  is  to  answer 
that  question. 

There  are  a number  of  avenues  of  propaganda  open  to 
the  labor  movement.  First  there  is  the  printed  page, — books, 
pamphlets,  magazines,  newspapers,  posters.  Second,  there 
are  the  bookstore  and  the  news-stand  as  channels  for  regular 
distribution.  Third,  there  is  the  screen.  Fourth,  there  are 
meetings,  lectures,  and  debates.  Fifth,  there  is  art  and  liter- 
ature. Through  all  of  these  channels,  ideas  are  being  dis- 
tributed, and  the  man  or  woman  who  is  seeking  a method 
of  saying  something  has  a wide  choice  of  the  means. 

In  both  organization  work  and  propaganda,  however,  one 
thing  must  be  borne  in  mind — the  rank  and  file  of  the  American 
people  are  babes  when  it  comes  to  questions  of  public  policy. 

Those  who  are  seeking  to  do  the  work  of  either  organiza- 
tion or  of  propaganda  must  bear  in  mind  the  character  of  the 
American  people.  America  is  vibrant  with  an  immense  life- 
force;  an  energy;  a driving  power;  a determination;  a will 
to  success.  The  climate,  the  abundant  resources,  the  race-stock 
— all  of  these  things  have  combined  to  make  the  American  a 

27 


frontiersman;  a pioneer.  Thus  far  his  energies  have  been 
devoted  to  the  task  of  producing  and  accumulating  material 
wealth.  His  ideals  point  primarily  in  this  direction,  and  his 
education  has  taught  him  to  measure  success  in  dollars.  Still, 
he  is  young.  His  spirit  is  vigorous.  His  vitality  is  unsapped. 
He  is  neither  decadent  nor  degenerate.  Filled  with  the  buoy- 
ancy of  youth  he  is  working,  playing,  and  beginning  to  look 
about  him  for  fresh  worlds  to  conquer.  He  is  even  asking 
where  these  worlds  lie  and  how  they  may  be  reached.  It  is 
the  answer  to  these  questions  that  the  organizations  and  the 
propaganda  of  the  labor  movement  must  supply. 


28 


LEAGUE  FOE  INDUSTRIAL  DEMOCRACY 
70  Fifth  Ave.,  New  York. 


The  League  for  Industrial  Democracy — the  successor  of 
the  Intercollegiate  Socialist  Society — has  for  its  object  “educa- 
tion for  a new  social  order  based  on  production  for  use  and 
not  for  profit”. 

The  educational  program  of  the  League  includes: 

(1)  The  organization  and  strengthening  of  groups  for  the 
thoughtful  discussion  of  problems  of  industrial  democracy 
in  centers  of  population,  and  in  colleges,  and  other  educa- 
tional institutions. 

(2)  The  development  of  a readable  and  scientific  pam- 
phlet and  book  literature  on  the  labor,  socialist  and  allied 
movements. 

(3)  The  promotion  of  research  work  on  specific  problems 
of  the  new  social  order. 

(4)  The  development  of  a national  speakers’  service. 

(5)  The  publication  of  facts  concerning  the  immediate 
labor  struggle  and  the  encouragement  of  all  efforts  at  work- 
ers’ education. 

(6)  The  arranging  of  debates,  mass  meetings,  summer 
and  winter  conferences  and  the  establishment  of  communica- 
tion with  groups  abroad. 


29 


To  carry  out  its  plans  for  reaching  “Main  Street”  with 
the  message  of  industrial  democracy,  the  League  must  have 
the  moral  and  financial  support  of  all  of  its  friends.  All 
who  believe  that  the  League  has  a place  to  fill  in  American 
life  are  urged  to  join  as  members,  to  contribute  to  its  funds, 
to  take  part  in  its  activities,  to  interest  others  in  its  aims. 
With  this  aid,  the  League  for  Industrial  Democracy  may  well 
become  one  of  the  great  educational  forces  helping  to  prepare 
the  way  for  a sane  industrial  order. 


MEMBERSHIP 

The  membership  of  the  League  is  divided  into  several 
classes.  Those  wishing  to  join  and  believing  in  the  principle 
of  ownership  and  production  for  public  use  and  not  for  private 
profit,  the  principle  of  social  ownership  and  democratic  con- 
trol of  industry,  are  eligible  for  active  membership;  other 
applicants  are  eligible  for  auxiliary  membership.  Auxiliary 
members  have  all  the  privileges  of  the  League  except  those 
of  voting  and  of  holding  office.  The  dues  of  active  and 
auxiliary  members  are  $3.00  a year.  Contributing  members 
pay  $5.00  a year;  sustaining  members,  $25.00. 

Members  receive  various  of  the  bulletins  and  pamphlets 
published  by  the  League,  and  are  privileged  to  attend  all 
chapter  and  League  meetings  and  conferences.  Special  arrange- 
ments for  dues  are  made  for  city  and  school  groups. 


30 


192... . 


LEAGUE  FOE  INDUSTRIAL  DEMOCRACY, 
Room  931,  70  Fifth  Avenue,  New  York  City. 

/ enclose 

as  membership  dues  for  the  current  year. 

I enclose 

as  a contribution. 

I pledge 

toward  the  work  of  the  League  payable 

Name  

Occupation  

Address  

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(Please  make  remittances  payable  to  the  order  of 
The  League  for  Industrial  Democracy.) 


Books  and  Pamphlets 

By  SCOTT  NEARING 

Wages  in  the  United  States $0.75 

Financing  the  Wage-earner’s  Family 1.25 

Reducing  the  Cost  of  Living 1.75 

Anthracite  1.00 

Poverty  and  Riches  1.25 

Social  Adjustment  2.25 

Social  Religion  1.25 

Woman  and  Social  Progress 2.25 

The  Super  Race 60 

Elements  of  Economics 1.60 

The  New  Education 1.50 

Economics  2.50 

Work  and  Pay 15 

The  Coal  Question 10 

The  Debs  Decision  15 

Labor  and  the  League  of  Nations 15 

A Nation  Divided  10 

The  New  Slavery 15 

The  One  Big  Union  of  Business 10 

Europe  in  Revolution  . . . . * 10 

Europe  and  the  Next  War 10 

The  American  Empire Paper,  50c.;  cloth,  1.00 

Order  from 

THE  LEAGUE  FOR  INDUSTRIAL  DEMOCRACY 
70  Fifth  Ave.,  N.  Y.  City,  or  The  Rand  Book  Store. 


\ 


3^s*.4 

*Z7p 

v.i. 


A Nation  Divided 


OR 


PLUTOCRACY 

— V ersus  - 

DEMOCRACY 


BY 


SCOTT  NEAR! N G 

Author  of  “Poverty  and  Riches”; 
“Income”;  “Wages  in  the  United 
States”;  “Anthracite”;  “Reducing 
the  Cost  of  Living”;  Etc. 


SOCIALIST  PARTY  OF  THE  UNITED  STATES 
220  S.  Ashland  Blvd.  ....  CHICAGO 

Chicago  Labor  Printing  Co.  •trfggRpfafc’  R04  1642  N.  Halsted  St. 


Table  of  Contents 


1.  A House  Divided — 

2.  Democracy  or  Plutocracy? 

3*  Chattel-Slavery  and  Wage  Slavery. 

4.  Who  Shall  Rule? 

5.  The  Trumps  to  the  Plutocrats. 

6.  Job  Ownership — The  Joker. 

7.  The  Ownership  of  the  Product. 

S.  The  Control  of  the  Surplus. 

9.  The  Channels  of  Public  Opinion. 

10.  The  Control  of  Political  Machinery. 

11.  The  Control  of  Opportunity. 

12.  The  Plutocracy  Possesses  the  Earth. 

13.  Some  Day — 

14.  The  Greatest  Number. 

15.  Service. 

16.  The  Key  to  Knowledge. 

17.  The  New  Leisure. 

18.  The  Trustees  of  Democracy. 

19.  The  Political  Rights  of  Democracy 

20.  Industrial  Action. 

21.  The  Method, 


Copyright  1920  by  the  docialist  Party  of  the  United  States. 
Chicago,  IlL 


Printed  in  U.  S.  A. 


^ p {{  Ps/uscc 


PLUTOCRACY  VS.  DEMOCRACY 

I.  A HOUSE  DIVIDED. 

THE  UNITED  STATES  cannot  hope  to  exist  part  demo- 
cratic and  part  plutocratic.  It  is  impossible  for  two 
huge  social  forces  like  democracy  and  plutocracy  to  divide 
the  field  between  them.  There  is  no  such  thing  as  com- 
promise. The  issue  must  be  met  and  decided,  once  for  all. 
There  will  be  discussion  and  compromise  on  the  details, 
but  on  the  main  issue  compromise  is  impossible,  unthink- 
able. 

The  conflict  between  the  South  and  the  North  over 
the  slavery  issues  was  like  the  present  conflict  between 
democracy  and  plutocracy.  The  greatest  statesmen  of 
the  day  tried  compromise.  There  was  the  Compromise  of 
1850;  there  was  the  Kansas-Nebraska  Bill.  Both  sides 
labored.  Each  was  willing  to  give  and  take.  But  neither 
was  willing  to  concede  the  one  fundamental  point  with- 
out which  negotiation,  diplomacy  and  compromise  were 
mere  wasted  effort. 

Was  the  principle  of  slave  labor  or  of  free  labor  to 
rule  in  America’s  economic  life?  That  was  the  question. 
Abraham  Lincoln,  democracy’s  champion  in  that  struggle, 
put  it  squarely  up  to  Judge  Douglas  in  the  debate  at 
Alton  (October  15,  1858).  “That  is  the  real  issue.  That 
is  the  issue  that  will  continue  in  this  country  when  these 
poor  tongues  of  Judge  Douglas  and  myself  shall  be  silent. 
It  is  the  eternal  struggle  between  the  two  principles — 
right  and  wrong — throughout  the  world.  They  are  the 
two  principles  that  have  stood  face  to  face  from  the  be- 
ginning of  time,  and  will  ever  continue  to  struggle.  The 
one  is  the  common  right  of  humanity,  and  the  other  the 
divine  right  of  kings.  It  is  the  same  principle  in  what- 
ever shape  it  develops  itself.  It  is  the  same  spirit  that 
says,  ‘You  work  and  toil  and  earn  bread  and  I’ll  eat  it.’ 
No  matter  in  what  shape  it  comes,  whether  from  the 
mouth  of  a king  who  seeks  to  bestride  the  people  of  his 
own  nation  and  live  by  the  fruit  of  their  labor,  or  from 
one  race  of  men  as  an  apology  for  enslaving  another  race, 
it  is  the  same  tyrannical  principle.” 

Once  more  liberty’s  world  old  challenge  to  tyranny 
sounded  across  the  years  and  the  eternal  struggle  be- 
tween right  and  wrong  swept  up  and  down  the  land. 
Was  an  outworn,  discarded  form  of  economic  life  to  con- 


DEMOCRACY  AND  PLUTOCRACY 


•i 


tinue  in  America  or  was  “freedom  of  contract”  to  be  ac- 
cepted? The  issue  was  fundamental.  It  had  to  be  met 
and  settled. 

War  was  by  no  means  inevitable.  The  slaves  might 
have  been  bought  and  freed  by  the  government.  But 
whether  the  issue  was  settled,  barbarically,  on  the  field 
of  battle,  or  intelligently  and  wisely  in  legislative  halls, 
settled  it  must  be,  and  settled  in  favor  of  the  social  system 
that  promised  most  for  the  happiness  and  nobility  of  the 
human  race.  When  there  was  arrayed,  as  in  this  case, 
an  outlived,  discredited  form  of  social  life,  against  a new, 
vital  and  apparently  superior  form  of  life,  there  was  only 
one  way  in  which  the  conflict  could  end. 

Slave  Labor  or  Free  Contract? 

That  was  the  issue  that  became  the  *gordian  knot 
of  Nineteenth  Century  American  statesmanship  and  that 
was  cut  by  the  sword. 


II.  DEMOCRACY  OR  PLUTOCRACY 

■yHE  ISSUE  between  democracy  and  plutocracy  cannot 
be  compromised.  Democracy  is  man  power;  p’utc  - 
racy  is  dollar-power.  Either  we  must  put  the  dollar 
above  the  man  or  else  we  must  put  the  man  above  the 
dollar. 

There  are  many  instances  in  which  we  can  do  both, 
and  there  are  not  wanting  a goodly  number  of  old  women 
of  both  sexes  who  are  still  confident  that  this  can  be  done 
permanently.  It  was  possible  while  the  issue  was  clouded 
by  other  questions.  Inject  the  tariff,  or  prohibition,  or  the 
religious  issue,  or  the  money  question,  and  for  the  time 
being  this  conflict  between  the  democracy  arid  the  plu- 
tocrary  for  the  control  of  the  United  States  sinks  into  a 
position  of  relative  unimportance.  The  issue  is  there, 
however,  and  it  will  remain  there  so  long  as  there  is  the 
difference,  which  the  profit  system  necessarily  maintains, 
between  the  contents  of  the  pay  envelope  and  the  price 
of  flour  and  shoes. 

Classes  are  developing  with  dizzying  speed  in  the 
United  States,  not  because  anyone  wills  that  they  shall 
develop,  but  because  the  abyss  that  yawns  between  those 
who  work  for  a living  on  the  one  hand  and  those  who 
own  for  a living  on  the  other,  is  so  broad  and  so  deep 
that  even  the  “fools  and  blind”  are  becoming  aware  of  its 
existence.  Once  let  its  presence  dawn  upon  the  great 
mass  of  mankind,  and  the  issue  will  take  the  center  of 
the  stage. 


DEMOCRACY  AND  PLUTOCRACY. 


3 


Years  passed  before  the  slavery  issue  came  to  a head 
in  the  United  States.  The  early  agitators — like  William 
Lloyd  Garrison — suffered  indignities  and  were  outlawed 
by  the  respectable  people  of  the  community.  The  time 
came,  however,  when  the  sale  of  men  and  women  for 
profit  was  an  issue  of  such  dramatic  power  that  no  one 
could  escape  it.  There  were  those  in  the  days  before 
the  Civil  War  who  believed  as  many  believe  today  that 
the  matter  could  be  hushed  up,  if  people  would  only 
stop  talking  about  it.  Judge  Douglas  took  this  point 
of  view  and  pressed  it  hard  in  his  debates  against  Lin- 
coln. Lincoln  met  him  fairly  on  the  issue  with  this  reply : 

“Is  it  true  that  all  the  difficulty  and  agitation  we 
have  in  regard  to  this  institution  of  slavery  springs  from 
office-seeking,  from  the  mere  ambition  of  politicians?  Is 
that  the  truth?  How  many  times  have  we  had  danger 
from  this  question?  Go  back  to  the  day  of  the  Missouri 
Compromise.  Go  back  to  the  Nullification  question,  at  the 
bottom  of  which  lay  this  same  slavery  question.  Go  back 
to  the  time  of  the  annexation  of  Texas.  Go  back  to  the 
troubles  that  led  to  the  Compromise  of  1850.  You  will 
find  that  every  time,  with  the  single  exception  of  the 
Nullification  question,  they  sprung  from  an  endeavor 
to  spread  this  institution.  There  never  was  a party  in  the 
history  of  this  country,  and  there  probably  never  will  be. 
of  sufficient  strength  to  disturb  the  general  peace  of  the 
country.  Parties  themselves  may  be  divided  and  quarrel 
on  minor  questions,  yet  it  extends  not  beyond  the  parties 
themselves.  But  does  not  this  question  make  a disturb- 
ance outside  of  political  circles?  Does  it  not  enter  into 
the  churches  and  rend  them  asunder?  What  divided 
the  great  Methodist  Church  into  two  parts,  North  and 
South?  What  has  raised  this  constant  disturbance  in 
every  Presbyterian  General  Assembly  that  meets?  What 
disturbed  the  Unitarian  Church  in  this  very  city  two  years 
ago?  What  has  jarred  and  shaken  the  great  American 
Tract  Society  recently,  not  yet  splitting  it,  but  sure  to 
divide  it  in  the  end?  Is  it  not  this  same  mighty,  deep 
seated  power  that  somehow  operates  on  the  minds  of 
men,  exciting  and  stirring  them  up  in  every  avenue  of 
Society, — in  politics,  in  religion,  in  literature  in  moral,  in 
all  the  manifold  relations  of  life?  Is  this  the  work  of 
politicians?  Is  that  irresistible  power,  which  for  fifty 
years  has  shaken  the  government  and  agitated  the  peo- 
ple, to  be  stilled  and  subdued  by  pretending  that  it  is  an 
exceedingly  simple  thing,  and  we  ought  not  to  talk  about 
it?  If  you  will  get  everybody  else  to  stop  talking  about 
it,  I assure  you  I will  quit  before  they  have  half  done  so. 


4 


CHATTEL-SLAVERY  AND  WAGE-SLAVERY. 


But  where  is  the  philosophy  or  statesmanship  which  as- 
sumes that  you  can  quiet  that  disturbing  element  in  our 
society  which  has  disturbed  us  for  more  than  half  a cen- 
tury, which  has  been  the  only  serious  danger  that  has 
threatened  our  institutions, — I say,  where  is  the  philosophy 
or  the  statesmanship  based  on  the  assumption  that  we  are 
to  quit  talking  about  it,  and  the  public  mind  is  all  at  once 
to  cease  being  agitated  by  it?  Is  it  not  a false  states- 
manship that  undertakes  to  build  up  a system  of  policy 
upon  the  basis  of  caring  nothing  about  the  very  thing 
that  everybody  does  care  the  most  about? — a thing  which 
all  experience  has  shown  we  care  a very  great  deal 
about?”  (Alton,  October  15,  1858). 

How  little  has  the  issue  been  changed!  How  similar 
is  the  situation  that  confronts  the  United  States  today! 

The  contest  between  those  who  work  for  a living  and 
those  who  own  for  a living  has  not  been  clear-cut  in  the 
past.  It  is  so  new,  so  unexpected  in  this  land  of  liberty, 
that  the  mass  of  people  do  not  yet  beHeve  in  its  existence, 
or,  if  they  do,  they  are  confident  that  it  can  be  cured  by 
an  act  of  Congress.  The  time  is  coming, — and  that  right 
soon, — when  the  American  people  will  see  the  issue. 


III.  CHATTEL-SLAVERY  AND  WAGE  SLAVERY. 

THE  ECONOMIC  issue  today  does  not  differ  in  any  con- 
siderable degree  from  that  which  existed  in  the  early 
years  of  the  Nineteen  Century.  The  South  held  solidly 
to  her  time-established  system.  The  North  was  develop- 
ing, rapidly,  in  the  wake  of  the  Industrial  Revolution  that 
had  transformed  Great  Britain.  The  old  and  the  new 
continued  for  a time,  side  by  side,  and  then  new  chal- 
lenged the  old  to  combat;  and  the  old  was  overthrown. 

Today  the  American  plutocracy  is  following  in  the 
wake  of  British  Imperial  development.  Exploitation  and 
parasitism  are  the  key-words  of  the  movement.  But, 
stay!  a new  idea  has  dawned — the  idea  of  social  and 
industrial  democracy.  It  has  transformed  Australasia;  it 
has  spread  over  Europe;  wiped  out  the  old  tyrannies  in 
Russia;  it  has  permeated  even  into  Britain  herself,  with 
her  time-established  system  of  economic  individualism. 
The  idea  is  winning — the  world  over.  Social  and  indus- 
trial democracy  is  coming.  The  new  idea  challenges 
the  old. 

The  issue  is  here  and  there  is  no  compromise.  Bear 
that  in  mind.  Never  forget  it  for  a moment. 


CHATTEL-SLAVERY  AND  WAGE-SLAVERY. 


5 


There  is  no  compromise  ! 

Compromise  will  be  attempted  as  it  was  in  the  case 
of  slavery,  but  compromise  cannot  succeed.  The  slave 
owners  said  they  would  compromise,  but  they  could  not. 
The  plutocracy  cries  out  its  desire  for  unity — but  social 
unity  built  upon  economic  conflict  is  like  a fire  built  on 
the  heaving  bosom  of  the  ocean. 

Notice  how  similar  are  the  issues  presented  by  chat- 
tel slavery  a hundred  years  ago  and  the  issue  presented 
by  wage  slavery  today. 

Under  the  system  of  chattel  slavery  which  prevailed 
in  the  United  States  up  to  1863,  one  man  owned;  another 
worked.  The  owner  was  master.  The  worker  was  slave. 
The  worker  labored,  the  master  took  the  product  of  his 
labor  and  gave  him  back  enough  to  provide  food,  cloth- 
ing, shelter  and  a little  leisure  and  recreation — the  simple 
necessaries  of  life. 

The  slave  owner  was  master  because  he  owned  the 
worker — the  slave.  The  power  of  his  ownership  gave 
him  the  first  fruits  of  the  slave’s  labor. 

Under  the  system  of  wage  slavery  now  prevailing  in 
the  United  States  one  man  owns;  another  works.  The 
owner  is  the  respectable,  well-to-do  “capitalistic”  part  of 
the  community.  The  worker  today  labors;  the  capitalist 
takes  the  product  of  his  labor  and  gives  the  worker  back 
enough  to  provide  food,  clothing,  shelter  and  a little 
leisure  and  recreation — the  simple  necessaries  of  life. 
With  this  one  exception  that  where  there  is  a powerful 
trade-union,  the  capitalist  gives  the  worker  what  he  must, 
and  then  charges  the  higher  labor  cost  into  the  price  of 
the  product  which  this  and  other  laborers  must  buy. 

The  master  owned  the  slave,  who  was  compelled  to 
work  for  him  in  order  to  live.  The  capitalist  owns  the 
job,  without  which  the  worker  cannot  possibly  maintain 
life  under  the  present  social  order.  Thus  the  job-owner 
is  still  master;  just  as  the  slave  owner  of  sixty  years  ago 
was  master. 

The  slave  owner  was  willing  to  feed,  clothe  and 
house  the  slave.  In  fact  there  were  many  owners  who 
prided  themselves  on  the  kindness  and  gentleness  with 
which  they  treated  their  slaves — the  members  of  their 
own  families  scarcely  fared  better.  There  were  other 
slave  owners  who  treated  their  slaves  well  for  the  same 
reason  that  they  treated  their  horses  well — because  they 
were  sufficiently  intelligent  to  see  that  it  paid.  Then 
there  were  a number  of  slave  owners  who  were  barbarous 
in  their  treatment  of  the  slaves.  It  is  undoubtedly  true 


6 


CHATTEL-SLAVERY  AND  WAGE-SLAVERY. 


that  kind  treatment  was  the  rule  and  brutality  the  ex- 
ception among  the  slave  owners.  Most  people  treat  their 
dogs  kindly;  only  a few  mistreat  them.  Kindness  is  more 
frequently  met  with  than  brutality  because  more  people 
are  dominated  by  kind  than  by  brutal  instincts.  In  the 
final  analysis,  however,  whether  treated  well  or  badly, 
the  notable  fact  about  the  Southern  Negroes  was  that 
they  were  slaves. 

The  capitalist  is  willing  to  pay  a wage  that  will 
feed,  clothe  and  house  the  wage  earner.  In  fact  there 
are  many  capitalists  who  pride  themselves  on  the  cordial 
personal  relations  that  exist  in  their  establishments.  They 
treat  their  employes  as  well  as  they  do  the  members  of 
their  own  families.  There  are  other  capitalists — and  the 
number  is  growing  rapidly — who  treat  their  workers  well 
for  the  same  reason  that  they  treat  their  horses  and  ma- 
chines well — because  they  are  sufficiently  intelligent  to 
see  that  it  pays.  Then  there  are  a number  of  other  cap- 
italists who  are  barbarous  in  their  treatment  of  their 
workers.  Cases  of  good  treatment  are  the  rule;  cases 
of  mistreatment  the  exception,  for  the  reasons  already 
noted.  In  the  final  analysis,  however,  whether  treated 
well  or  badly  after  they  get  their  jobs,  the  fact  remains 
that  the  American  wage-workers  must  go  to  the  capital- 
ists and  get  permission  to  work  at  the  jobs  which  the 
capitalists  own  before  they  can  make  a living  for  them- 
selves and  their  families — in  other  words,  they  are  vassals 
of  the  capitalist. 

The  average  slave  owner  was  willing  to  do  anything 
within  reason,  except  free  the  slaves.  The  average  job- 
owner  is  willing  to  do  anything  within  reason,  except 
let  go  of  the  job.  As  Tolstoi  so  caustically  remarked, — 
“The  rich  are  willing  to  do  anything  for  the  poor,  except 
get  off  their  backs.” 

The  slave  wanted  the  necessaries  of  life,  but  more 
than  that,  and  better  than  that,  he  wanted  liberty — 
that  is,  the  thinkers  among  the  slaves  wanted  liberty, 
because  they  had  a vision  of  its  possibilities.  They  be- 
lieved that  “no  man  is  good  enough  to  rule  another  man 
without  that  other  man’s  consent,”  and  they  wanted  a 
chance  to  say  who  would  be  master.  There  was  no  such 
thing  as  compromise.  Either  they  were  slaves  or  else  they 
were  freemen.  There  could  be  no  middle  ground. 

A like  situation  exists  today  in  the  struggle  between 
the  plutocracy  and  the  democracy. 

The  worker  wants  the  necessaries  of  life,  but  more 
than  that,  and  better  than  that,  he  wants  liberty — that 


WHO  SHALL  RULE? 


7 


is,  the  thinkers  among  the  wage  earners  want  libery, 
because  they  have  a vision  of  its  possibilities.  They  be- 
lieve that  “no  man  is  good  enough  to  rule  another  with- 
out that  other  man’s  consent,”  and  they  want  a chance  to 
name  the  job-master.  There  is  no  such  thing  as  com- 
promise. Either  they  are  sovereign  in  matters  of  general 
public  concern,  or  else  they  are  not.  There  can  be  no 
middle  ground. 


IV.  WHO  SHALL  RULE? 

THE  PEOPLE  of  the  United  States,  or  the  owners  of 
A the  United  States  must  control  the  affairs  of  the  coun- 
try. Compromises  will  be  as  futile  and  as  ephemeral  in 
the  solution  of  this  issue  as  they  were  in  the  solution  of 
the  slave  question. 

If  the  people  control,  a man  will  have  a say  in  pub- 
lic affairs  because  he  is  a man,  just  as  a woman  will  have 
a say  in  public  affairs  because  she  is  a woman.  The  mat- 
ters which  are  of  concern  to  the  people  will  be  settled 
by  the  people,  because  they  are  people.  This  is  democ- 
racy. 

If  the  dollars  win,  men  and  women  will  have  a say 
in  public  affairs  because  they  are  rich.  The  richer  they 
are  the  more  say  they  will  have.  Wealth  will  be  of 
greater  importance  than  people.  Property  rights  will  be 
sanctified ; human  rights  ignored,  except  in  so  far  as  their 
enforcement  bulwarks  property  rights.  This  is  plutoc- 
racy. 

The  idea  of  democracy  is  as  far  from  the  idea  of  plu- 
tocracy as  the  East  is  far  from  the  West.  Democracy 
rests  on  the  idea  of  service;  plutocracy  rests  on  the  idea 
of  profit.  Democracy  aims  at  equal  opportunity;  plu- 
tocracy aims  at  special  privilege.  Like  oil  and  water,  the 
two  ideas  cannot  mix. 

The  people  of  the  United  States  are  facing  this  issue 
today,  in  the  case  of  the  railroads.  Shall  they  be  owned 
by  the  plutocracy,  maintained  as  a form  of  special  priv- 
ilege, managed  by  the  wealth  interests,  and  run  for  pro- 
fits, or  shall  they  be  owned  by  the  democracy,  maintained 
as  a means  of  transportation  and  communication,  man- 
aged by  the  community  and  run  for  service?  The  same 
issue  will  come  up  sooner,  or  later,  in  the  case  of  every 
industry  in  the  country. 

Democracy  aims  at  equal  opportunity.  Plutocracy 
aims  at  special  privilege.  The  two  ideas  are  in  eternal 


8 


THE  TRUMPS  TO  THE  PLUTOCRATS. 


conflict,  for  the  triumph  of  one  means  the  overthrow 
of  the  other. 

The  issue  between  them  is  one  of  principle,  just  as 
slavery  was  an  issue  of  principle.  The  slave  owners  ar- 
gued that  the  slaves  were  well  fed,  clothed  and  housed, 
which  was  utterly  beside  the  point,  because  the  slaves, 
no  matter  how  they  were  treated  were  still  slaves,  and 
the  issue  was  one  between  slavery  and  freedom.  The 
capitalist  today  points  to  good  wages,  short  hours,  sanita- 
tion, welfare  work,  which,  though  admirable  in  them- 
selves, are  wholly  foreign  to  the  argument,  since  the  issue 
is  one  of  sovereignty — in  America  shall  people  rule  or 
dollars? 

The  struggle  continues  and  must  continue  until  one 
of  the  contestants  is  destroyed. 

If  the  job-owners  win,  they  will  perpetuate  the  sys- 
tem of  special  privilege  under  which  one  man  can  say 
to  another, — “You  work  and  toil  and  earn  bread  and 
I’ll  eat  it.” 

If  the  workers  win,  the  owners  will  be  compelled  to 
go  to  work  for  a living,  because  under  democracy,  “he 
that  will  not  work,  neither  shall  he  eat.” 

The  conflict  is  on  in  the  United  States.  It  is  raging 
at  this  moment.  Now  and  again  it  breaks  out  in  strikes, 
lockouts,  riots,  petty  revolutions.  No  matter  what  its 
form  the  fight  is  a fight  to  the  finish,  because  no  commun- 
ity can  endure  part  plutocratic  and  part  democratic. 


V.  THE  TRUMPS  TO  THE  PLUTOCRATS. 

THE  contest  between  the  democracy  andjdie  plutocracy 
for  the  control  of  the  United  States  is  being  waged 
with  most  of  the  high  cards  in  the  hands  of  the  plutocrats. 
They  have  been  in  a position  of  such  peculiar  advantage 
that  the  rapid  transformation  from  the  old  age  of  small 
shopkeepers  and  individual  job-owners  into  the  new  age 
of  big  business  has  placed  many  of  the  vital  forces  of  life 
in  their  possession.  Chance  and  the  wind  have  favored 
a few,  who,  because  of  this  favor,  have  been  hurled  into 
position  of  pre-eminent  authority. 

The  rapid  sweep  over  a new  continent  gave  the  plu- 
tocracy its  hold  on  the  country’s  resources.  Nature  had 
been  so  generous!  The  wilderness  seemed  so  inexhaust- 
ible ! Possession  was  so  natural  and  so  inevitable  that  no 
one  paused  to  think  or  even  to  look  until  the  favored  few, 
who  had  possessed  themselves  of  the  great  body  of  nat- 


THE  TRUMPS  TO  THE  PLUTOCRATS. 


9 


ural  opportunity,  were  discovered  in  the  act  of  hogging 
what  was  left. 

The  people  of  America  had  called  for  a king.  Cir- 
cumstances gave  them  special  privilege,  and  like  the 
frogs  in  the  fable,  they  were  shouting  with  childish  glee 
over  their  good  fortune,  when  they  suddenly  discovered 
that  their  king  was  devouring  them. 

The  plutocracy  gained  its  possession  of  the  resources 
because  it  was  the  natural — the  easy  thing.  Fate  beck- 
oned, and  the  plutocracy  sprang,  full  fledged,  from  the 
circumstances  attending  the  double-quick  conquest  of  a 
continent. 

Had  the  resources  been  less  rich  and  abundant,  had 
the  time  been  longer  and  the  difficulties  grater,  the  story 
would  doubtless  be  a very  differnt  one.  But  as  the  land 
lay,  the  plutocracy  was  able  to  develop  its  economic 
spurs  over  night. 

The  lightning  sweep  of  the  American  people  across 
the  continent  gave  the  plutocracy  its  grip  on  the  natural 
resources.  The  revolutionary  transformation  in  industry 
guaranteed  its  control  of  the  productive  machinery. 

The  plutocracy  professes  a horror  of  revolutionists. 
If  Edison,  Steinmetz,  Jones,  Ford,  Taylor,  Rockefeller 
and  Hill  were  to  serve  a year  in  prison  for  every  revolu- 
tionary twist  that  they  gave  to  the  productive  mechan- 
ism, they  would  have  spent  their  entire  lives  behind  the 
bars.  The  last  few  years  have  witnessed  paroxysms  of 
revolutionary  change  in  every  phase  of  business  life  from 
the  construction  of  tools  and  machinery  to  the  keeping 
of  costs  and  the  direction  of  the  productive  units. 

The  wizards  of  industrial  activity  have  changed  the 
structure  of  business  life  even  more  rapidly  than  they 
have  conquered  the  wilderness.  True  sons  of  their  revo- 
lutionary ancestors,  they  have  cut  and  slashed,  remod- 
eled and  built  anew  with  little  or  no  regard  for  the  old, 
and  guided  only  by  a fever  of  desire  for  the  conquest  of 
new  worlds  and  the  amassing  of  ever  growing  fortunes. 

The  speedy  economic  development  of  the  country, 
with  its  rich  resources  and  its  manifold  industrial  im- 
provements has  gone  hand  in  hand  with  a rapidly  growing 
population,  and  has  resulted  in  an  immense  increase  in 
wealth. 

Revolution  are  the  stalking  grounds  of  predatory 
power.  Napoleon  built  on  the  French  Revolution.  Crom- 
well on  the  revolution  against  tyranical  royalty  in  Eng- 
land. Revolution  spells  opportunity  for  the  man  waiting 


10 


THE  TRUMPS  TO  THE  PLUTOCRATS. 


to  climb  into  the  saddle  of  special  privilege  and  irrespon- 
sible authority. 

Peaceful  times  give  little  opportunity  for  the  am- 
bitious schemer.  Institutions  are  well  rooted;  customs 
and  habits  are  established;  life  is  regulated  and  held  to 
earth  by  the  established  framework  of  society. 

Revolution  comes — fiercely,  impetuously,  uprooting 
the  institutions,  overthrowing  the  customs,  bearing  old 
habits  from  their  resting  place.  All  is  uncertainty — 
chaos,  when,  lo!  a man  on  horseback  gathers  the  loose 
strands  together  saying, — “Good  people,  I know,  fol- 
low me!” 

He  does  know!  But  woe  to  the  people  that  follow 

him! 

Yet,  what  shall  they  do?  Whither  shall  they  go? 
How?  When?  Who  can  be  relied  upon  in  this  dark 
hour? 

The  man  on  horseback  rises  in  his  stirrups — speak- 
ing in  mighty  accents  his  message  of  hope  and  cheer,  re- 
assuring, promising,  encouraging,  enthusing  all  who  coma 
within  the  sound  of  his  voice.  What  wonder  that  the 
people  follow  where  he  leads  and  beckons? 

The  revolutionary  changes  in  American  economic 
life  during  the  past  few  years  have  given  the  monopo- 
list his  special  privilege  and  his  autocratic  power.  He 
was  the  man  on  horseback,  quick,  clever,  shrewd,  far- 
seeing,  persuasive,  powerful.  Through  the  course  of 
these  revolutionary  changes,  the  Hills,  Goulds,  Harri- 
mans,  Wideners,  Weyrehauesers,  Guggenheims,  Rocke- 
fellers, Carnegies  and  Morgans  did  to  the  American  eco- 
nomic organization  exactly  what  Napoleon  did  to  the 
French  political  organization — they  took  possession  of  it. 
This  should  occasion  no  surprise.  On  the  contrary,  it  was 
the  most  natural  thing  in  the  world.  The  people  had  no 
idea  what  was  happening.  They  were  unacquainted  with 
social  values.  Their  experiences  gave  them  no  clue  to 
the  gigantic  structure  of  business  organization  that 
sprang  into  life  within  one  generation.  They  had  no  idea 
of  social  sin.  They  were  still  mulling  over  the  ten  com- 
mandments of  individual  “don’ts.”  Their  eyes  and  ears 
were  filled  with  the  sights  and  sounds  of  an  individualistic 
regime  when  the  deluge  of  modern  industrialism  burst 
upon  them. 

The  people  were  taken  aback.  They  protested  and 
struggled.  Leaders  arose  who  analyzed  and  explained. 
The  people  began  to  comprehend  and  to  make  headway 
against  the  new  problems  of  public  business,  when  the 


JOB  OWNERSHIP— THE  JOKER. 


11 


great  war  struck,  like  a bolt  from  the  blue,  and  all  was 
chaos  again. 

Patriotism  ar.d  sectionalism  were  substituted  for  in- 
telligence and  enlightenment.  Hate  replaced  knowledge; 
organized  force  played  havoc  with  human  solidarity. 
People  gasped,  struggled,  struck  out  blindly,  protested. 
The  night  of  ignorance  hung  over  the  lands. 

Only  in  the  office  buildings,  the  stock  exchanges,  the 
banks  and  the  business  houses,  the  light  of  understanding 
burned  brightly.  Not  for  half  a century  had  the  fields 
been  so  ripe  for  harvest,  and  never,  perhaps,  in  the  an- 
nals of  recent  economic  development  has  the  plutocracy 
made  a more  intelligent  use  of  its  opportunities.  During 
those  hours  of  uncertainty,  the  plutocracy  strengthened 
its  hold  on  the  job;  secured  a firmer  grip  on  prices;  piled 
up  surplus  wealth  to  its  credit;  strangled  the  free  ex- 
pression of  opinion;  enlarged  its  grip  on  the  machinery 
of  government  and  bulwarked  itself  more  impregnably 
than  ever  against  the  wrath  to  come. 


VI.  JOB  OWNERSHIP— THE  JOKER. 

JOB  ownership  is  the  big  card  of  the  plutocracy — the 
joker  in  the  pack  of  economic  advantages.  School, 
press  and  pulpit  unite  to  persuade  the  modern  worker 
that  he  is  a free  man.  He  has  liberty  of  contract.  He 
may  vote.  His  rights,  are  safeguarded  by  constitutional 
provision  and  statutory  enactment. 

That  is  the  joker.  The  worker  is  given  freedom, 
and  that  very  right — the  right  to  work  for  a living — 
places  him  at  the  mercy  of  the  man  who  owns  the  job 
with  which  he  must  work  in  order  to  live. 

The  rights  that  have  been  guaranteed,  thus  far,  are 
political  rights.  The  real  power  of  the  modern  commun- 
ity is  economic  and  so  long  as  that  remains  true  political 
rights  are  merely  phrases  for  judicial  interpretation  and 
forensic  expesition.  They  have  no  body  and  no  soul. 

The  law  of  the  modern  world  is, — “Work  or  starve.” 
For  a few  the  law  reals, — “Own  and  enjoy,”  but  they 
are  the  exception.  The  great  mass  are  subject  to  the 
other  command. 

The  worker  may  boast  certain  political  rights,  but 
even  these  the  job  owner  may  annul  by  prescribing  the 
limits  beyond  which  the  job  taker  may  not  go. 

There  is  no  limit  on  the  amount  of  industrial  property 
that  one  man  may  own.  Therefore  there  is  no  limit  on 
the  number  of  jobs  he  may  control.  It  is  possible  (not 


12 


JOB  OWNERSHIP— THE  JOKER. 


immediately  likely)  that  one  coterie  of  men  might  secure 
possession  of  enough  industrial  property  to  control  the 
jobs  of  all  of  the  gainfully  occupied  people  in  American 
industry.  If  the  result  could  be  achieved,  these  tens  of 
millions  of  workers  would  be  able  to  earn  a living  only 
in  case  the  small  coterie  in  control  permitted  them  to 
do  so. 

Thus  far  the  movement  toward  the  concentration  of 
job-ownership  in  a few  hands  has  been  very  rapid.  As 
it  has  progressed,  the  abyss  between  job  owner  and  job 
taker  has  widenel.  The  corporation;  diffused  stock  and 
bond  control ; absentee  ownership ; the  huge  size  of  in- 
dustrial units;  the  growth  of  financial  power,  all  have 
helped  to  de-personalize  economic  relations,  at  the  same 
time  that  they  have  strengthened  the  hands  of  the  job 
owners. 

Job  ownership  goes  to  the  bottom  of  life — no  job, 
no  food. 

By  setting  the  conditions  on  the  job,  the  job  owner 
can  limit  life’s  outlook  rigidly. 

The  job-owner  holds  the  chief  power  in  the  appor- 
tionment of  income.  The  worker  must  sell  his  labor.  The 
job  owner  need  not  buy  it  today.  The  job  taker  is  there- 
for at  a woeful  disadvantage. 

The  job  taker  must  take  a job  if  he  is  to  live  in  the 
modern  economic  world.  He  must  take  what  offers.  A 
common  laborer  with  a wife  and  four  children,  who  can- 
not possibly  live  on  less  than  a thousand  dollars  a year  in 
the  modern  city  cannot  wait  until  that  thousand  is  forth- 
coming. If  he  did,  he  and  his  family  would  starve  to 
death.  He  must  . sell  his  labor  where  he  can  and  at  the 
best  terms  that  he  can  make. 

Hunger  drives  from  below.  The  fear  of  want  and 
the  lash  of  social  emulation  and  rivalry  push  from  above. 
The  job  taker,  wage  earner,  clerk  and  salaried  man  leap 
frantically  into  the  crush  of  humanity  and  give  their  lives 
struggling  there.  Above  them  hovers  the  job  owner — 
with  his  fingers  on  the  resources,  the  franchises  and  spe- 
cial privileges,  the  tools  and  the  credit  of  the  community 
— the  monarch  and  the  sovereign  of  the  modern  economic 
world. 


THE  OWNERSHIP  OF  THE  PRODUCT. 


13 


VII.  THE  OWNERSHIP  OF  THE  PRODUCT. 

THE  industrial  monarch  holds  control  of  the  job  with 
one  hand.  With  the  other  he  apportions  the  product 
of  industry.  He  exploits  the  worker  on  one  side.  On  the 
other  he  gouges  the  consumer. 

There  is  a theory  that  since  all  values  are  labor  val- 
ues, the  worker  alone  may  be  exploited.  Unfortunately 
for  the  theory,  the  facts  point  pretty  conclusively  to  an 
exploitation  based  on  the  monopoly  of  the  product. 

Here,  for  example,  are  two  coal  fields.  The  one  pro- 
duces soft  coal,  the  other  anthracite.  The  same  amount 
of  labor  power  goes  into  the  production  of  each  ton  of 
coal,  but  while  the  soft  coal  industry  is  competitive,  the 
anthracite  industry  is  monopolized.  The  soft  coal  there- 
fore sells  for  $3  and  the  anthracite  for  $5  a ton.  The 
extra  two  dollars  is  the  toll  taken  in  monopoly  profits  by 
the  monopolists. 

An  illustration  may  be  taken  from  the  coal  indus- 
try. Soft  coal  is  selling  for  $2.50  a ton  at  the  mine.  The 
miner  is  receiving  70  cents  for  each  ton  that  he  digs.  In- 
dustry speeds  up.  The  demand  for  coal  grows  rapidly, 
and  the  selling  price  of  the  coal  jumps  to  $5,  while  the 
worker  gets  no  increase  in  wages.  The  difference  be- 
tween the  two  prices — $2.50 — represents  the  accelerated 
demand  for  coal,  and  the  consequent  monopoly  power  in 
the  hands  of  the  coal  owners. 

While  industry  was  competitive,  the  pressure  of  com- 
petition kept  prices  at  a cost  level  and  the  exploiting 
power  of  the  owner  was  confined  to  the  job  holder.  To- 
day industry  has  largely  ceased  to  be  competitive  and 
the  exploiting  power  of  the  job-owner  is  extended  to  the 
product  user. 

The  modern  town-dweller  is  almost  wholly  at  the 
mercy  of  the  private  owner  of  the  products  upon  which 
he  depends.  The  ordinary  city  dweller  spends  two-fifths 
of  his  income  for  food ; one-fifth  for  rent,  fuel  and  light, 
and  one-fifth  for  clothes.  Practically  the  entire  supply 
of  these  things  is  in  the  hands  of  private  profiteers.  Food, 
houses,  fuel,  (with  the  exception  of  the  gas  supply  in  some 
cities),  and  clothing  are  privately  owned  and  sold  at  a 
price  that  will  yield  the  maximum  profit  to  the  owners. 

The  public  ownership  of  streets  and  water  works, 
of  some  gas,  electricity,  street  cars,  and  public  markets, 
is  a negligible  factor  in  the  problem.  The  private  mo- 
nopolist is  in  control,  and  he  is  in  a position  through  the 
control  of  transportation,  storage,  and  merchandising 
facilities,  to  gouge  the  consumer  savagely. 


14 


THE  CONTROL  OF  THE  SURPLUS. 


VIII.  THE  CONTROL  OF  THE  SURPLUS. 

THE  plutocracy  is  doubly  entrenched.  It  owns  the  jobs 

upon  which  most  families  depend  for  a living.  It 
owns  the  necessaries  of  life  which  most  families  must 
purchase  in  order  to  live.  Further,  the  plutocracy  con- 
trols the  surplus  wealth  of  the  community. 

Those  who  seek  to  justify  the  present  system  of  job 
ownership  cannot  deny  that  the  big  surplusses  go  to  the 
plutocracy.  They  are  forced  to  admit  that  the  railroads, 
public  utilities,  large  manufacturing  enterprises,  prosper- 
ous real  estate  ventures,  and  other  forms  of  business  en- 
terprise carry  hundreds  of  millions  in  surplus  and  special 
funds,  which  may  be  used  for  fees  and  salaries,  and  which 
in  some  cases  have  been  used  for  bribery  and  corruption. 
It  requires  no  argument  to  prove  that  a man  with  an  in- 
come of  a million  a year  and  personal  expenditures  of  a 
hundred  thousand  has  an  annual  surplus  of  nine  hundred 
thousand.  In  1916,  120  people  in  the  United  States  ad- 
mitted that  they  had  incomes  of  a million  or  more  a year. 
The  income  tax  returns,  and  the  various  investigations  of 
business  and  public  utility  activities  have  furnished  an 
abundance  of  conclusive  evidence.  “That  is  all  true,” 
the  apologists  admit,  “and  let  us  grant  it,  but  the  real 
surplus  of  the  community  is  provided  by  the  wage  earn- 
ers, small  salaried  men  and  farmers  who  deposit  their 
money  in  the  banks  and  who  take  out  insurance  policies 
and  shares  in  building  and  loan  associations.” 

Then  it  is  the  wage  earners  and  the  small  salaried 
people  and  farmers  who  inaugurate  thrift  campaigns 
and  work  their  lips  off  to  sell  insurance?  No,  it  is  the 
banks  and  insurance  companies  that  do  these  things. 
Why?  Think  a moment.  It  is  because  when  the  wage 
earner,  the  small  salaried  man,  and  the  farmer  puts  his 
money  into  the  bank  or  the  insurance  policy,  he  has 
placed  it  under  the  control  of  the  plutocracy. 

The  bank  depositor  does  not  control  his  deposit.  The 
policy  holder  does  not  control  the  doings  of  the  insurance 
company.  Theoretically,  in  the  case  of  mutual  com- 
panies, he  does.  Practically,  as  everyone  familiar  with 
the  financial  world  knows,  the  business  interests — the 
plutocracy — are  in  absolute  control  of  the  surplus  that 
arises  from  the  business  of  banking  and  insurance. 

When  the  capitalist  wishes  to  start  a new  project, 
he  goes  to  the  bank  and  borrows  the  money  placed  there 
by  the  small  depositor,  and  the  lending  is  in  the  hands, 
not  of  the  depositor  but  of  the  banker.  Big  business, 
which  talks  so  glibly  about  “risk”  and  “venture”  has 


THE  CHANNELS  OF  PUBLIC  OPINION. 


15 


/ 

built  its  power  by  risking  and  venturing  the  money  saved 
and  stored  away  by  the  small  fry  all  over  the  country. 

The  billions  of  surplus  wealth  that  come,  each  year, 
under  the  control  of  the  plutocracy,  carry  with  them  an 
immense  authority  over  the  affairs  of  the  community. 
The  plutocracy  owes  much  of  its  immediate  power  to  the 
fact  that  it  is  in  a position  to  direct  the  flow  of  this  surplus 
into  such  channels  as  it  may  select. 


IX.  THE  CHANNELS  OF  PUBLIC  OPINION. 

WO  ONE  can  question  the  control  which  the  plutocracy 
exercises  over  the  jobs,  the  industrial  product,  and 
the  economic  surplus  of  the  community.  These  facts  are 
admitted  on  all  hands.  The  corollaries  which  flow  natur- 
ally from  these  axioms  of  present  day  economic  life  are 
not  so  readily  accepted.  . 

Many  people  are  slow  to  believe  that  the  plutocracy 
exercises  a large  measure  of  control  over  the  channels  of 
public  opinion.  Yet  the  fact  remains  and  its  explanation 
is  not  far  to  seek. 

The  channels  of  public  opinion — the  school,  the 
press,  the  pulpit, — are  not  directly  productive  of  tangible 
economic  goods,  yet  they  depend  upon  tangible  economic 
goods  for  their  maintenance.  Whence  should  these  goods 
come?  Whence  but  from  the  system  that  produces  them, 
through  the  men  who  control  that  system?  The  plu- 
tocracy exercises  its  power  over  the  channels  of  public 
opinion  in  two  ways, — first,  by  a direct  or  business-office 
control ; and  second  by  an  indirect  or  social  prestige  con- 
trol. Both  forces  are  powerful  and  they  work  hand  in 
hand. 

The  business  office  control  is  direct  and  simple. 
Schools,  colleges,  newspapers,  magazines  and  churches 
need  money.  They  cannot  produce  tangible  wealth  di- 
rectly, and  they  must  therefore  depend  upon  the  surplus 
which  arises  from  the  productive  activities  of  the  eco- 
nomic world.  Who  controls  that  surplus?  The  plutoc- 
racy. Who,  then,  is  in  a position  to  dictate  terms  in  all 
business  matters?  Who,  but  the  plutcracy? 

The  facts  are  incontrovertible.  It  is  not  mere  chance 
that  makes  the  overwhelming  majority  of  school-board 
members;  college  trustees;  newspaper  managers  and 
church  vestrymen  successful  business  and  professional 
men.  It  is  necessary  to  work  through  these  men  to  secure 
the  “sinews  of  war.”  They  are  in  the  positions  of  power 
because  they  control  the  sources  of  wealth. 


16 


THE  CONTROL  OF  POLITICAL  MACHINERY. 


The  second  method  of  maintaining  control — through 
the  control  of  social  prestige — is  indirect,  but  none  the 
less  effective.  The  young  man  in  college,  the  young 
graduate  looking  for  a job;  the  young  man,  rising  in  his 
profession  and  the  man  gaining  prestige  in  his  chosen 
career  are  brought  into  constant  contact  with  the  in- 
fluential men  of  the  business  world.  It  is  the  business 
world  that  dominates  the  clubs  and  the  vacation  spots; 
it  is  the  business  world  that  is  met  in  church,  at  the  din- 
ner table  and  at  the  social  gathering. 

The  man  who  would  “succeed”  must  retain  the  favor 
of  this  group.  He  does  so  automatically,  instinctively  or 
semi-consciously, — but  he  does  it; — it  is  the  thing  that 
everyone  else  does  andi  he  falls  in  line. 

The  plutocracy  need  not  necessarily  bribe.  It  need 
not  resort  to  illegal  methods  in  order  to  control  the  pro- 
fessions. The  ordinary  channels  of  advertising,  of  busi- 
ness acquaintance  and  patronage,  of  philanthropy  and  of 
social  intercourse  clinch  the  power  of  the  plutocracy  over 
the  channels  of  public  opinion. 


X.  THE  CONTROL  OF  POLITICAL  MACHINERY. 

rE  American  government, — city,  state  and  national, — 
is  in  almost  the  same  predicament  as  the  schools, 
newspapers  and  churches.  It  does  not  turn  out  tangible, 
economic  products.  It  depends,  for  its  support,  upon 
taxes  which  are  levied  in  the  first  instance,  upon  prop- 
erty. Who  are  the  owners  of  this  property?  The  pluto- 
cracy. Who  therefore,  pays  the  bills  of  the  government? 
The  plutocracy. 

It  is  not  necessary  to  stop  here  and  inquire  whether 
the  tax  is  not  ultimately  shifted  to  the  consumer.  The 
immediate  source  is  certainly  the  property  owner,  who 
takes  it  for  granted  that  the  law  should  be  administered 
in  his  behalf.  The  result?  A government  maintained!, 
primarily  in  the  interests  of  the  propertied. 

The  naive  citizen  hears  with  astonishment  so  sea- 
soned a veteran  of  the  political  arena  as  Mr.  Elihu  Root 
asserting  that  there  is  in  this  country  a visible  govern- 
ment of  politics  and  an  invisible  government  of  business 
which  controls  the  visible  government  through  its  handy 
man,  the  political  boss.  Surprising?  No!  After  reading 
the  revelations  published  by  Lincoln  Steffens  and  his  co- 
workers,  of  the  manipulation  of  municipal  politics  in  the 
interest  of  business,  it  is  quite  a matter  of  course,  and  it 
becomes  even  more  commonplace,  if  one  reflects  that  the 


THE  CONTROL  OF  POLITICAL  MACHINERY. 


17 


money  for  the  support  of  the  capitalist  political  parties 
and  party  machinery  must  come  from  those  who  control 
the  surplus  wealth  of  the  country — the  plutocracy. 

Woodrow  Wilson,  student  of  history  and  of  political 
institutions,  goes  to  great  lengths  in  characterizing  the 
control  exercised  by  Big  Business  over  Governmental 
machinery.  In  his  “New  Freedom,”  pages  57-58,  he  says, 
“The  masters  of  the  government  of  the  United  States  are 
the  combined  capitalists  and  manufacturers  of  the  United* 
States.  Suppose  you  go  to  Washington  and  try  to  get  at 
your  government.  You  will  always  find  that  while  you 
are  politely  listened  to,  the  men  really  consulted  are  the 
men  who  have  the  biggest  stake — the  big  bankers,  the 
big  manufacturers,  the  big  masters  of  commerce,  the 
heads  of  railroad  corporations  and  of  steamship  corpor- 
ations. Every  time  it  has  come  to  a critical  question,  these 
gentlement  have  been  yielded  to  and  their  demands  have 
been  treated  as  the  demands  that  should  be  followed* 
as  a matter  of  course.  The  government  of  the  United 
States  at  present  is  a foster-child  of  the  special  interests.” 
Again  (page  35)  Mr.  Wilson  sums  up  the  situation  in 
these  words — “An  invisible  empire  has  been  set  up  above 
the  forms  of  democracy.” 

This  is  the  direct  control  exercised  by  the  plutocracy 
over  the  machinery  of  government.  Its  inderect  control 
is  no  less  important,  and  is  exercised  in  exactly  the  same 
way  as  in  the  case  of  the  channels  of  public  opinion. 

Lawyers  receive  preferment  and  fees  from  business 
— there  is  no  other  large  source  of  support  for  lawyers. 
Judges  ae  chosen  from  among  these  same  lawyers. 
Usually  they  are  lawyers  who  have  won  preferment  and 
emolument.  Legislatures  are  made  up  mostly  of  lawyers 
and  of  business  men,  or  the  tools  of  lawyers  and*  business 
men.  The  result  is  as  logical  as  it  is  inevitable. 

Laws,  constitutions,  court  decisions  and  the  whole 
structure  of  the  government  is  built  to  bolster  and  safe- 
guard property.  It  is  the  plutocracy  that  stands  to  win 
no  matter  which  way  the  political  wind  blows. 

The  pluocracy  controls  the  machinery  of  govern- 
ment because  it  puts  up  the  taxes  and  the  campaign  funds 
of  the  capitalist  parties.  It  controls  public  officials  be- 
cause hey  have  been,  are,  or  hope  to  be  on  its  payrolls 
or  participants  in  its  profits.  The  plutocracy  is  in  the 
saddle — the  saddle  of  economic  and  social  power  and 
privilege.  Irresponsible  power  and  special  privilege  have 
always  proved  hard  ridters. 


18 


THE  CONTROL  OF  OPPORTUNITY. 


XI.  THE  CONTROL  OF  OPPORTUNITY. 

THE  plutocracy  thus  controls  opportunity.  In  place 
of  an  equal  chance  in  the  race  of  life  being  open  to 
all,  on  equal  terms,  special  privilege  is  enjoyed  by  the 
chosen  few.  These  few  are  only  too  often  chosen,  as  they 
were  in  the  dark  ages  of  European  Feudalism,  by  the 
chance  circumstances  of  birth. 

The  choice  spots  on  the  earth — the  timber,  minerals 
and  fuels — the  centrally  located  land  in  the  cities  and  the 
industrial  regions;  the  tools  and  machines  upon  which 
large  scale  production  depends;  the  machinery  of  credit; 
the  franchises  and  special  privileges  are  in  the  hands  of 
a very  few.  They  enjoy  the  fruits  of  this  property  while 
they  live,  and  at  their  death  they  pass  the  property  on  to 
their  descendants — without  regard  for  their  ability  or 
their  worth. 

Opportunity  is  the  breath  of  life  for  most  human  be- 
ings. Without  it  they  get  nowhere.  With  it  men  and 
women  of  mediocre  talents  take  places  of  brilliant  au- 
thority and  hold  them  successfully. 

Opportunity  is  essential.  The  opportunity  to  be  well 
born,  the  opportunity  for  a good  time;  the  opportunity 
of  sufficient  food,  clothing,  shelter,  air  and  sunshine;  the 
opportunity  to  grow  up  among  congenial  surroundings — 
whether  natural  or  social;  educational  opportunity;  eco- 
nomic opportunity;  opportunity  for  contact  with  living 
deeds  and  vital  people, — all  of  these  and  many  more 
phases  of  opportunity  shape  the  mold  of  life. 

Speaking  in  terms  of  economic  life,  the  most  import- 
ant form  of  opportunity  is  an  income  sufficient  to  provide 
the  necessaries  and  simple  comforts  of  existence.  With 
such  an  income  goes  a relief  from  the  most  primitive 
phases  of  the  jungle-struggle. 

The  importance  of  leisure,  as  an  element  in  achieve- 
ment, has  been  well  pointed  out  by  Lester  F.  Ward  in  his 
“Applied  Sociology.”  There  Ward  shows  how  the  pres- 
ence of  leisure  has  inspired  achievement. 

The  plutocracy  of  the  United  States  has  a means — 
property  or  ownership  income — of  securing  leisure  with- 
out working  for  it.  Under  the  system  of  property  income 
payment  that  the  plutocracy  has  helped  to  evolve,  those 
who  own  may  live,  without  work,  on  the  proceeds  of  the 
labor  performed  by  others.  By  this  means  the  plutocracy 
secures  the  leisure  of  the  community  for  itself.  By  the 
same  means,  it  confines  the  leisure  to  itself,  because  leis- 
ure is  based,  almost  necessarily,  upon  the  ownership  of 
property. 


THE  PLUTOCRACY  POSSESSES  THE  EARTH. 


19 


The  elaborate  system  of  protective  social  machinery 
that  is  thrown  about  property — the  legal,  social  and  in- 
dustrial provisions  that  guarantee  its  security — are,  in  the 
final  analysis,  the  protection  which  the  plutocracy  erects 
about  its  leisure.  Without  these  defenses,  ownership  in- 
come would  be  insecure.  With  them  ownership  income 
is  guaranteed  and  perpetuated. 

The  step  from  leisure  to  culture  is  a short  one.  Men 
and  women,  in  the  hurly-burly  of  life  have  no  time  for  the 
massaging  and  manicuring  opportunities  that  accompany 
assured  income  and  surplus  wealth.  Study,  travel,  con- 
verse with  learned  men  and  women,  researches  into  the 
arts  and  literatures,  come  only  to  the  fortunate  ones  who 
are  relieved  from  the  immediate  brute  struggle  for  exist- 
ence. 

The  man  fighting  for  bread  has  little  time  to  “turn 
his  eyes  up  to  the  eternal  stars.”  The  western  cult  of  “ef- 
ficiency” makes  no  allowance  for  philosophic  propensi- 
ties. Its  object  is  product  and  it  is  satisfied  with  nothing 
short  of  that  sorddd  goal. 

The  members  of  the  plutocracy  are  relieved  from  the 
food  struggle.  Their  ownership  of  the  social  machinery 
guarantees  them  a secure  income,  from  which  they  need 
make  no  appeal. 

The  plutocracy,  because  it  owns  the  jobs,  the  indus- 
trial products,  the  social  surplus,  the  channels  of  public 
opinion  and  the  political  machinery,  also  enjoys  the  op- 
portunity that  goes  with  adequate  assured  income,  leisure 
and  culture. 


XII.  THE  PLUTOCRACY  POSSESSES  THE  EARTH. 

THE  plutocracy  is  in  the  saddle.  The  earth  is  theirs, 
and  the  fullness  thereof.  They  and  their  children 
possess  the  land. 

They  hold  in  their  hands  a key — property  ownership 
— which  opens  the  structure  of  social  wealth.  They  are 
the  blessed  ones.  Theirs  are  the  things  of  this  world. 

The  plutocracy  enjoys  the  fleshpots  today.  They 
hold  the  vantage  points.  The  vital  positions  are  in  their 
hands.  Economically,  politically,  socially,  they  are  su- 
preme. 

If  the  control  of  material  things  can  make  a group 
of  people  secure,  the  plutocracy  is  secure.  They  hold 
property,  prestige,  power. 


20 


SOME  DAY— 


A disinterested  outsider,  coming  into  the  world  and 
watching  the  contest  between  the  plutocracy  and  the 
democracy,  if  he  put  his  trust  in  riches  would  inevitably 
conclude  that  the  plutocracy  had  won  the  game — for 
good.  If,  on  the  other  hand,  he  believed  that  “the  battle 
is  not  always  to  the  strong,  nor  the  race  to  the  swift” ; if 
he  had  heard  intelligently  the  prophecy,  “not  by  might, 
nor  by  power,”  he  might  be  willing  to  turn  from  this  orgy 
of  materialistic  worldly  authority  to  examine  the  trump 
cards  of  the  democracy. 


XIII.  SOME  DAY— 

THE  trump  cards  of  the  democracy  are  good  cards  if 
they  are  used.  Some  of  them  are  very  strong,  but 
little  understood.  The  democracy  is  ignorant  of  itself 
and  of  its  own  right.  Its  strength  is  rough,  crude,  unor- 
ganized. 

The  people  will  win  in  the  end.  Finally  the  well- 
being of  men  and*  women  will  be  placed  above  the  profit 
on  investments.  The  man  will  be  put  above  the  dollar — 
some  day.  The  time  is  coming  when  the  production  of 
human  happiness  and  nobility  will  be  considered  the  most 
exalted  enterprise  in  which  any  group  of  people  can  en- 
gage. The  people  will  triumph  finally  because  their  con- 
tentions are  founded  on  sound  principles  of  human  life. 

Some  day — some  day,  the  democracy  will  be  estab- 
lished. The  victory  may  take  ten  years.  It  may  take  a 
thousand.  The  fight  may  be  fought  to  a successful  finish 
by  the  people  of  America,  of  Europe  or  of  Asia.  There  is 
no  time,  no  place  and  no  people  that  are  ordained  to  win 
the  victory  for  democracy,  but  the  time,  the  place  and  the 
people  that  witness  that  victory  will  see  one  of  the  turning 
points  in  the  history  of  the  human  race. 

Democracy  will  win  only  when  the  people  set  out  to 
win.  Democracy  will  triumph  when  the  people  champion 
their  own  cause.  The  people  alone  can  set  the  people 
free. 


Hence  the  message, — “When  you  will,  peoples  of 
the  earth — in  your  own  time!  Study,  understand,  strug- 
gle, return  invincible  to  the  conflict.  But  be  sure  that  the 
passing  years  will  see  your  cause  advancing, — inch  by 
inch — your  trenches  creeping  up  to  the  trenches  of  plu- 
tocracy ; your  mines  and  sappers  undercutting  their 
breastworks.  When  you  will,  democracy,  and  in  your 
own  good  time !” 


THE  GREATEST  NUMBER. 


21 


XIV.  THE  GREATEST  NUMBER. 

THE  democracy  is  the  people — the  common  people — 
the  pack,  the  mob,  the  herd.  The  democracy  is  the 
mother  bosom  and  mother  heart  of  the  human  race.  The 
joyful,  sad,  yearning,  suffering,  longing,  despondent, 
hopeful,  fearful  human  race  is  made  up  principally  of  the 
sommon  people.  Neither  good  nor  badl,  neither  high 
nor  low,  neither  saints  nor  sinners,  the  great  body  of  man- 
kind lives  its  life. 

The  ideas  and  ideals  of  the  centuries  center  about 
the  common  people.  The  cry  for  democracy  is  the  cry  of 
the  common  people. 

“The  greatest  good  to  the  greatest  number”  means 
their  number.  They  are  five-sixths  of  the  community. 

“Majority  rule”  means  their  rule.  They  are  the  ma- 
jority. 

“Government  of  the  people,  by  the  people,  for  the 
people”  means  their  government.  They  are  the  people. 

If  democracy  means  anything,  it  means  that  the  peo- 
ple shall  manage  public  affairs  in  their  own  interest  and 
for  their  own  advantage,  with  special  privilege  for  none 
and  equal  opportunities  for  all. 

The  plutocracy  smiles  patronizingly.  It  filches  lead- 
ers from  among  the  people  and  enters  their  names  upon 
its  own  payroll.  It  dominates  and  controls  economic,  so- 
cial and  political  life.  It  directs  public  opinion  through 
its  control  of  the  schools,  the  press  and!  the  pulpit.  It 
trains  the  machine  guns  on  the  mob,  where  necessary. 
But  when  someone  speaks  of  the  time  when  the  people 
shall  rule,  it  scoffs  derisely. 

Listen,  plutocracy,  to  the  sighing  of  the  winds  of 
progress  over  the  pages  of  recent  history.  Do  you  catch 
the  ground  tone?  Do  you  hear  the  one  deep,  plaintive 
note  that  swells  and  surges,  and  then  sinks  into  the  great 
silence.  “Brotherhood — humanity — mankind — brother- 

hood— humanity — mankind — brotherhood,”  do  you  un- 
derstand? Each  time  the  note  swells,  it  swells  a little 
louder.  Each  time  it  drops  into  the  silence,  he  silence  is 
a litle  shorter.  The  human  ear  is  responding  to  its  ca- 
dence. The  human  heart  is  making  a place  for  its  uplift- 
ing power.  “Brotherhood  — humanity  — mankind  — 
brotherhood.”  Plutocrats!  heirs  of  property,  prestige, 
power — The  meek  shall  inherit  the  earth ! The  plain 
people,  the  common  run  of  mankind  will  triumph,  be- 
cause they  are  the  greatest  number;  because  they  un- 
derstand the  cadence  and  respond  to  the  soul-notes  of 
“brotherhood.” 


22 


SERVICE. 


If  there  is  any  destiny  that  is  observable  in  the  af- 
fairs of  men,  that  destiny  seems  to  point  to  the  time  when 
the  people — the  great,  unenlightened,  inarticulate,  ex- 
ploited body  of  common  people — will  see  with  their  eyes; 
will  hear  with  their  ears;  will  affirm  their  rights;  will 
rule  the  earth ! 

When  you  will,  common  people.  When  you  will — in 
your  own  good  time.  The  earth  is  yours,  you  make  it. 
Enter  in, — when  you  will. 


XV.  SERVICE. 

THE  democracy  has  the  numbers.  In  the  end,  the  num- 
bers will  win  the  victory.  Numbers  is  the  big  trump 
of  the  democracy.  No  less  significant  is  the  service  that 
the  plain  people  render. 

Life  is  built  upon  service.  All  of  the  things  that  are 
enjoyed;  all  of  the  things  that  are  possessed;  all  of  the 
necessaries,  comforts  and  luxuries;  all  of  the  wealth,  leis- 
ure, knowledge,  art,  philosophy,  is  built  upon  service — 
the  thing  done  by  one  person  and  enjoyed  by  another. 

From  those  days— now  many  tens  of  thousands  of 
years  in  the  dim  past — when  the  female  first  learned  to 
care  for  her  offspring;  when  men  first  learned  the  hunt 
in  packs;  when  the  members  of  the  family  and  the  tribe 
first  learned  to  stand  by  one  another  for  mutual  benefit — 
from  that  day  to  this,  life  has  been  built  upon  service — 
upon  the  things  that  one  human  being  does  for  another. 

He  that  is  greatest  among  us  must  be  the  servant  of 
all.  Prometheus  was  great  because  he  brought  fire  to 
men  ; Minerva  was  great  because  she  taught  men  wisdom ; 
Hiawatha  was  great  because  he  instructed  his  people  in 
the  arts  of  war  and  peace ; Pericles  was  great  because  he 
advanced  learning;  Socrates  was  great  because  he  spoke 
truth;  Washington  was  great  because  he  helped  to  give 
his  fellowmen  liberty.  It  is  because  of  what  they  did 
for  their  fellows  that  the  great  men  of  history  have  bee; 
esteemed.  He  that  would  be  great  must  serve. 

The  greater  the  service,  the  greater  the  leader. 
Those  who  have  performed  the  greatest  service  have  al- 
ways been  venerated  as  the  greatest  among  the  leaders. 

Parasitism  in  every  fcrm  is  doomed  to  failure,  be- 
cause it  violates  this  law  of  life.  The  parasite  says  to  his 
fellow, — “You  work  and  toil  and  earn  bread,  and  I’ll  eat 
it.”  He  demands  service,  giving  none  in  return.  He  is  a 
failure  from  the  beginning.  He  takes  without  giving.  He 
absorbs  without  returning. 


SERVICE. 


23 


Job-owners,  who  live  without  labor,  upon  the  labor 
of  other  people,  through  the  ownership  of  the  jobs  with 
which  these  other  people  must  work,  are  flying  in  the 
face  of  the  universe.  They  are  deriding  life.  They  are 
seeking  to  perpetuate  an  existence  for  which  they  need 
not  pay.  They  are  trying  to  establish  perpetual  social 
motion. 

The  workers  of  the  world  are  those  who  perform  its 
service — the  great  mass  of  common-mankind  and  woman- 
kind. Their  backs  are  bent  over  their  toil;  their  faces 
are  lined;  their  figures  are  gnarled,  twisted,  distorted; 
their  hair  is  streaked  with  gray,  but  they  live — ardently, 
vigorously,  fiercely.  Day  by  day  as  they  labor  and  serve, 
they  are  depositing  in  the  bank  of  the  ages  the  coin  of  hu- 
man experience.  Day  by  day  they  deposit.  The  time 
will  come  when  they  will  present  their  pass-books  and 
demand  payment  in  full. 

This  is  the  language — the  truth — that  they  speak. 

“We  have  fed  you  all  for  a thousand  years, 

And  you  hail  us  still  unfed, 

Tho’  there’s  never  a dollar  of  all  your  wealth, 

But  marks  the  workers  dead. 

We  have  yielded  our  best  to  give  you  rest, 

And  you  lie  in  crimson  wool ; 

For  if  blood  be  the  price  of  all  your  wealth, 

Good  God,  we  ha’  paid  in  full! 

“We  have  fed  you  all  for  a thousand  years, 

For  that  was  the  doom,  you  know, 

From  the  days  when  you  chained  us  in  your  fields, 

To  the  strike  of  a week  ago. 

You  ha’  eaten  our  lives  and  our  babies  and  wives, 
And  we’re  told  it’s  your  legal  share; 

But  if  blood  be  the  price  of  your  lawful  wealth, 

Goojl  God,  we  ha’  bought  it  fair!” 

\ 

There  is  never  a mine  blown  skyward,  but  we’re 
buried  alive  for  you, 

There  is  never  a wreck  drifts  shoreward  now  but 
we  are  its  ghastly  crew; 

Go  reckon  our  dead  by  the  forges  red  and  the 
factories  where  we  spin, 

For  if  blood  be  the  price  of  your  accursed  wealth, 
Great  God,  we  ha’  paid  it  in. 

The  democracy  deposits,  deposits  in  the  bank  of  life. 
The  plutocracy  draws  out,  draws  out, — but  some  day — . 

Today  property,  prestige,  power  are  the  open  doors 
to  respect.  The  time  will  come  when  this  will  be  recog- 


24 


THE  KE^  TO  KNOWLEDGE. 


nized  and  understood — that  he  that  is  greatest  must  be 
the  servant  of  all.  Then  respectability  will  be  based  on 
service  and  he  only  will  be  enitled  to  respect  who  serves 
his  fellows. 


XVI.  THE  KEY  TO  KNOWLEDGE. 

THE  first  two  cards  of  the  democracy  are  the  all  im- 
portant ones  of  numbers  and  service, — all  important 
because  the  development  of  social  life  seems  to  be  away 
from  the  jungle  struggle  of  competition  toward  co-opera- 
tion and  mutual  helpfulness. 

“Brotherhood”  sounds  better  to  the  human  heart 
than  “property,  prestige  and  power.”  The  more  men 
think,  the  deeper  they  go  into  the  philosophy  of  life,  the 
more  clearly  dio  they  understand  that  the  power  of  the 
heart  and  the  mind  are  infinitely  greater  than  the  power 
of  the  heel  and  the  fist.  The  currents  of  civilization  seem 
to  flow  toward  brotherhood.  The  impulses  of  life  seem 
to  press  toward  service.  Brotherhood  and  service  will  be 
the  foundation  stones  of  that  society  that  is  to  be — that 
world-democracy  of  the  future. 

These  things  are  known  to  those  who  have  read, 
thought  and  wondered  about  life.  The  developments  of 
the  past  few  centuries  have  pushed  the  democracy  rapidly 
toward*  its  final  trimph.  In  this  movement  the  greatest 
single  factor  has  been  the  free  school. 

The  open  book  gave  learning  to  those  who  could 
read.  But  all  could  not  read. 

The  open  public  discussion  gave  enlightenment  to 
those  who  could  understand.  But  only  a few  had  the 
training  that  would  give  them  understanding. 

The  people  of  a democracy  must  read  in  order  to  un- 
derstand. They  must  understand  in  ordier  to  register  in- 
telligent decisions  and  to  survive  as  a democracy.  Hence 
the  immense  importance  of  the  free  school  in  which  all  of 
the  children  of  all  of  the  people  receive  a training  that 
opens  their  eyes  to  life. 

The  movement  for  free  public  education  has  spread 
over  America  and  over  the  world.  First  the  primary 
school,  then  the  grammar  school,  later  the  high  school 
and  finally  the  university  have  been  made  a part  of  the 
public  educational  system.  To  these  schools  all  may  go. 
To  the  lower  schools  all  must  go.  Education — the  special 
privilege  of  the  few — has  become  the  supreme  right  of 
all  mankind. 


THE  NEW  LEISURE. 


25 


The  school  takes  the  growing  child  from  his  mother’s 
knee.  First  of  all  he  must  grow  well — in  body,  in  mind, 
in  spirit.  Next  he  must  be  made  into  a human  being  who 
can  associate  successfully  with  his  fellows,  in  the  home, 
the  neighborhood,  the  work  shop,  the  city,  the  world. 
Last,  he  must  be  prepared  to  take  up  some  vocation  in 
life,  the  pursuit  of  which  will  yield  him  a living.  The 
school,  organized  to  prepare  and  assist  children  to  live 
effectively,  must  meet  all  of  these  needs. 

Besides  the  school,  there  are  abundant  other  avenues 
of  educational  activity.  The  library,  the  lecture  plat- 
form, the  newspaper  and  magazine,  the  theatre  and  pic- 
ture play,  pamphlets,  tracts  and  propaganda  from  organ- 
izations of  all  descriptions,  help  toward  a wider,  more 
complete  understanding. 

The  people  cannot  all  be  scholars.  There  is  no  ne- 
cessity for  that.  But  they  can  all  be  intelligent  upon  the 
great  issues  of  life. 

Literacy — the  ability  to  read  and  write — is  not  an 
end  in  itself — far  from  it — but  it  is  one  of  the  indispens- 
able tools  with  which  the  structure  of  democracy  is  built. 


XVII.  THE  NEW  LEISURE. 

THE  leisure  which  modern  life  has  brought  has  not  gone 
to  the  plutocracy  alone — the  people  in  every  walk 
of  life  are  enjoying  some  of  its  fruits. 

The  leisure  which  the  wage-earner  secures  is  some- 
times of  very  doubtful  value.  The  speed  of  industry  in- 
creases 25  per  cent,  while  the  ten-hour  day  replaces  the 
day  of  twelve  hours.  The  industrial  pace  increases  an- 
other 25  per  cent,  while  the  hours  are  reduced  from  10  to 
9 a day.  Another  25  per  cent  increase  in  the  pace  and  the 
day  is  reduced  to  eight  hours.  The  gain  in  working  time 
has  been  more  than  offset  by  the  growing  demands  of 
industrial  life. 

Leisure  must  be  more  than  free  time,  if  it  is  to  be  of 
value.  It  must  be  a leisure  of  energy  as  well  as  a leisure 
of  hours. 

The  twelve  hour  day,  in  a modern  factory,  is  as  dark 
as  darkest  Africa  from  a social  point  of  view.  The  worker 
in  the  twelve  hour  shift  has  scarcely  the  time  to  speak 
to  his  family  or  to  enjoy  his  friends.  The  eight  hour  day 
may  be  even  darker  from  the  health  point  of  view  if  it 
deprives  the  eight-hour  worker  of  his  energy  to  such  a 
degree  that  he  cannot  maintain  physical  health  under  this 
eight  hours  of  high-speed  industrial  effort. 


26 


THE  TRUSTEES  OF  DEMOCRACY. 


The  decreases  in  hours  from  the  old  eleven  and 
twelve  to  the  modern  eight  and  nine  hour  shifts  has  meant 
free  time.  Whether  it  has,  likewise,  meant  energy  for 
study  and  thought,  only  the  future  can  decide. 

The  present  day  efficiency  of  industrial  production 
makes  possible  a relatively  large  amount  of  leisure.  It 
is  probable  that  a four  or  five  hour  day,  for  all  persons 
of  producing  age  and  capacity,  would  create  enough 
wealth  to  provide  everyone  with  all  the  necessaries  and 
most  of  the  simple  comforts  of  life.  Each  step  in  en- 
hanced efficiency  increases  this  probability. 

The  world  produces  enough,  and  more  than  enough 
to  feed,  clothe,  house  and  educate  all  of  the  sons  and 
daughters  of  all  of  the  people.  The  possibility  is  there. 
When  will  it  be  realized?  Only  when  the  people,  speak- 
ing through  an  invincible  organization,  insist  that  it  shall 
be  so. 


XVIII.  THE  TRUSTEES  OF  DEMOCRACY. 

THE  common  people  have  an  immediate,  direct  contact 

with  life.  They  taste  realism  to  the  full.  They  know 
more  about  thorns  than  about  roses,  but  they  know  life. 

The  reactions  of  the  plain  people  are  largely  emo- 
tional or  instinctive- — not  complicated  by  the  fierce  pres- 
sure of  the  vested  interests  which  play  so  large  a part  in 
the  thinking  of  our  time. 

This  life  with  the  world  has  taught  the  people  to 
hate  oppression  and  injustice  and  to  love  a square  deal. 
They  believe  in  justice.  They  yearn  for  truth.  When  a 
new  gospel  is  heeded  by  the  common  people, — when  they 
hear  it  gladly, — the  learned  do  well  to  listen  to  its  mes- 
sage because  out  of  the  depths  of  life  experience,  the 
common  people  know. 

The  common  people  make  up  the  body  of  the  human 
family.  The  joys,  sorrows,  pleasures,  pains,  hardships 
and  triumphs  of  the  race  are  the  joys,  sorrows,  p^asures, 
pains,  hardships  and  triumphs  of  the  plain  people. 

The  common  people  are  the  trustees  of  the  ideals  and 
aspirations  of  the  race.  From  among  them  flow  the  fierce, 
red  currents  of  strong  life.  The  hope  of  democracy  lies 
in  the  people — for  the  most  part  in  the  poor  people — who 
have  always  carried  the  remainder  of  the  world  upon 
their  backs. 


THE  POLITICAL  RIGHTS  OF  DEMOCRACY. 


27 


“Ye  who  think  yourselves  wise,  shall  perish  through  ig- 
norance ; 

Ye  who  think  yourselves  benevolent,  shall  perish  through 
greed ; 

Ye  who  think  yourselves  strong,  shall  perish  through 
weakness; 

Ye  who  think  yourselves  virtuous,  shall  perish  through 
sin. 

“Take  not  opinion  from  the  world  of  these; 

Go  to  the  founts  of  human  nature  in  the  average  man, 

Taste  for  yourself,  judge  for  yourself; 

Find  there  the  ingredients  of  life,  humanity,  society, 
the  world. 

“And  do  you  know,  if  truth  survives,  it  lives  among  the 
poor; 

If  any  truth  shall  come,  it  shall  appear  among  the 
poor.”* 


XIX.  THE  POLITICAL  RIGHTS  OF  DEMOCRACY. 

LIKE  the  ability  to  read  and  write  political  rights  are 
mere  machinery.  They  are  not  an  end  in  themselves, 
since  they  arrive  nowhere.  At  the  same  time  they  are 
a great  step  in  the  right  direction. 

Political  rights  are  the  expression  of  sovereignty. 
They  are  not  sovereignty,  and  they  may  be  exercised  in 
such  a way  as  to  vest  sovereignty  in  the  hands  of  political 
spoilsmen.  The  franchise  is  not  necessarily  an  advantage. 
Only  in  case  it  is  wisely  used,  can  it  be  a power  for  the 
advancement  of  human  well-being. 

Political  rights  are  indispensable  in  a society  organ- 
ized on  political  lines.  They  are  like  the  pipes  in  a water 
system.  Without  them  no  water  system  is  possible.  With 
them  and  without  the  water,  the  system  is  merely  an 
empty  shell. 

The  European  peasont,  illiterate,  and  without  the  ma- 
chinery of  political  rights  upon  which  the  American  de- 
mocracy rests,  is  deprived  of  two  essential  weapons  in 
his  struggle  for  liberty.  At  the  same  time  he  may  enjoy 
greater  liberty  than  the  literate  American  citizen.  The 
display  of  political  intelligence  of  the  people  of  Russia 
illustrates  the  point. 


*Vision  of  War,  Lincoln  Colcord,  N.  Y.  Macmillan  1916. 
P.  47  and  77. 


28 


INDUSTRIAL  ACTION. 


Sovereignty  in  a democracy  rests  absolutely  with  the 
people.  They  have  the  final  decision — they  are  the  last 
authority  on  every  issue  of  public  policy.  If  the  people 
wished  to  do  so,  they  could  rewrite  the  Constitution; 
abolish  the  usurped  power  of  the  Supreme  Court  to  de- 
clare laws  unconstitutional;  confiscate  such  private  prop- 
erty as  it  needed  for  public  uses,  and  put  all  of  the  job- 
owners  to  work  for  a living  by  taking  all  rent,  and  inter- 
est for  social  purposes.  There  is  no  limit  upon  the  things 
that  the  citizens  of  a democracy  may  do  if  they  so  choose. 
On  the  other  hand,  they  need  do  nothing,  if  they  do  not 
choose  to  exert  themselves. 

Democracy  signifies  free  choice.  The  citizenship  in  a 
democracy  is  free  to  make  or  mar  the  public  life. 

Political  rights  are  of  immense  potential  importance. 
They  are  worthless  unless  they  are  used.  Used,  they  are 
the  means  that  enable  the  citizens  of  the  democracy  to 
assert  their  sovereignty. 

The  common  people  of  the  United  States,  who  are  the 
vast  majority  of  the  population,  have  the  right  to  vote. 
Let  these  people  once  understand  their  power;  let  them 
know  that  when  they  decide  to  abolish  industry  for  profit 
and  every  other  form  of  special  privilege,  then  and  only 
then  will  it  be  abolished;  let  them  realize  that  by  select- 
ing from  among  themselves  representatives  who  have  his 
point  of  view  and  delegating  them  to  overthrow  the  plu- 
tocracy, they  can  set  up  a government  that  will  place  hu- 
man rights  above  the  rights  of  property ; let  them  vision 
a world  made  safe  for  democracy  by  their  effective  op- 
position to  their  real  enemies, — the  plutocracy  in  every 
land,  and  the  work  of  winning  the  worldi  for  democracy 
is  well  begun. 


XX.  INDUSTRIAL  ACTION. 

THE  common  people  of  the  world  have  another  means 
of  asserting  their  power — through  industrial  action. 
The  beginnings  of  industrial  democracy  may  be  found  in 
the  industrial  union  which  is  gaining  so  rapidly  over  the 
old  craft  union. 

The  craft  union  was  jealously  exclusive.  It  was  orig- 
inally organized  to  protect  a small  group  of  workers  who 
were  engaged  in  a particular  craft.  None  of  the  workers 
outside  of  this  one  craft  were  allowed  to  join  the  craft 
union. 


INDUSTRIAL  ACTION. 


29 


Crafts  have  been  disappearing  in  recent  years.  The 
craft  is  merged  in  the  large,  organized,  specialized*  indus- 
try, which,  in  turn,  is  sub-divided  into  a myriad  of  lesser 
occupations. 

The  disappearance  of  crafts  makes  the  position  of 
the  craft  union  untenable.  With  the  economic  basis  of  its 
craft  in  the  melting  pot  of  industrial  specialization,  the 
craft  union  goes  to  the  scrap  heap  of  outworn,  discarded 
social  institutions. 

The  logical  organization  for  the  workers  in  a special- 
ized, large  scale  industry  is  the  industrial  union, — that 
is,  a union  open  to  all  and  on  equal  terms.  Such  an  or- 
ganization gives  each  man  an  equal  say  in  an  industry, — 
an  equal  say  with  all  of  his  fellow-workers. 

Many  of  the  leaders  of  the  labor  movement  go  even 
farther,  insisting  that  all  workers,  no  matter  what  indus- 
try they  may  be  engaged  in,  should*  belong  to  one  great 
organization  in  which  working  class  solidarity  is  the 
watchword,  and  in  which  the  interests  of  all  of  the  work- 
ers present  a united  front  to  the  organized  plutocracy. 

“In  union  there  is  strength.”  The  plutocrats  know 
that,  and  they  have  organized  in  every  direction,  and 
w'ith  a thoroughness  and  efficiency  that  are  menacing  the 
very  existence  of  democracy. 

The  common  people  do  not  yet  understand*  the  im- 
portance of  solidarity.  When  they  do,  they  will  stand, 
shoulder  to  shoulder,  electing  their  own  kind  of  political 
office;  fighting  side  by  side  with  their  own  kind  in  the 
industrial  field;  educating,  organizing,  preaching  ana* 
practicing  the  doctrine  of  each  for  all  and  all  for  each. 

The  common  people  of  the  United  States  have  num- 
bers; theirs  is  the  life  of  service  ; they  can  read  and  write ; 
they  are  securing  leisure ; they  have  the  spirit  of  liberty ; 
they  have  political  rights,  and*  the  beginning  of  industrial 
democracy. 

The  plutocracy  has  property,  prestige  and  power — 
the  things  of  the  present  are  all  in  their  hands,  but  to- 
morrow will  dawn  and  then — then  the  democracy  may 
be  awake  to  its  possibilities. 

The  big  cards  of  the  democracy  are  potential  ones. 
They  may  be  used  if  only  the  people  will.  The  democracy 
has  in  its  grip  all  of  the  machinery  for  the  establishment 
of  popular  sovereignty — if  it  will ! 


30 


THE  METHOD. 


XXI.  THE  METHOD. 

THE  DEMOCRACY  and  the  plutocracy  are  struggling 
for  the  control  of  the  United  States — of  the  Western 
World.  The  issue  is  clear  cut — people  against  property; 
men  versus  dollars. 

The  plutocracy  is  in  the  saddle  with  property,  pres- 
tige, power.  The  democracy — the  rank  and  file  of  men 
and  women — with  numbers  and  service  and  the  burning 
upward  pressure  of  human  life,  is  demanding  the  earth 
as  its  heritage.  Day  by  day,  year  by  year,  the  contest 
grows  fiercer.  The  plutocracy  is  determined  to  hold  its 
power;  the  democracy  is  out  to  win! 

The  indomitable  spirit  of  youth  is  with  the  democ- 
racy. The  young  people  are  rising  in  protest,  and  the 
cry  of  their  resentment  against  things  as  they  are  sounds 
across  the  land. 

An  immense  fund  of  enthusiasm  is  latent  in  the  souls 
of  these  young  men  and  women.  It  is  not  for  nothing  that 
there  has  been  a tremendous  change  in  school  and 
college  courses  from  the  classics  to  social  science.  It  is 
not  mere  chance  that  is  leading  tens  of  thousands  of  high 
school  and  college  students  to  do  their  major  work  and 
carry  the  chief  line  of  their  interest  in  history,  economics, 
sociology  and  politics.  These  subjects  are  intensely  hu- 
man; they  have  a vital,  gripping  appeal;  they  point  the 
way  to  better  co-ordinated,  more  satisfying  relationships 
between  the  members  of  the  human  family.  Democracy’s 
hope  lies  in  the  proper  education  of  these  ardent,  ideal- 
istic, youthful  souls. 

The  same  force  is  working  everywhere.  Young  law- 
yers, ministers,  teachers,  journalists,  scientists,  and  lit- 
erary men  are  revolting  against  the  time  worn  grooves  of 
predatory  life  and  demanding  an  opportunity  to  make 
a society  that  is  truly  social. 

These  young  people,  in  school  and  in  the  early  years 
of  their  professional  careers,  are  named  legion.  They 
have  faith,  hope,  enthusiasm,  ideals,  and  they  are  rap- 
idly evolving  a purpose  to  have  these  ideals  realized. 

Look  well,  O Plutocracy!  Examine  carefully  the 
premises  that  lead  all  these  young,  hopeful  ones — these 
symbols  of  the  future — to  side  against  your  established 
order  of  life.  There  is  no  more  portentous  sign  in  the 
social  universe  than  their  indifference  to  you  and  their 
enthusiasm  for  the  democratic  society  that  is  to  be. 


WHAT  ARE  THESE  PREMISES? 


3 I 


XXII.  WHAT  ARE  THESE  PREMISES? 

THE  young  men  and  women  of  the  United  States 
who  are  trained  to  intelligent  thinking  see  the  struc- 
ture of  present  day  society  toppling  under  the  pressure 
of  a great  world  crisis.  Many  of  them  believe  that  they 
feel  the  agony  accompanying  the  death  throes  of  the 
capitalist  system.  Understanding  social  problems,  they 
realize  that  they  must  live  for  the  next  thirty  years  in  a 
world  for  the  conditions  of  which  they  are  at  least  in 
part  responsible,  and  they  intend  to  devote  their  energies 
to  making  the  best  possible  world  for  themselves  and 
for  their  descendants. 

The  conditions  surrounding  the  world  crisis  compel 
the  men  and  women  of  the  younger  generation  to  view 
largely  and  seriously  the  world  life  in  which  they  must 
participate. 

A study  of  society  shows  that  old  institutions  inevit- 
ably break  down,  only  to  be  replaced  by  newer  and  more 
vigorous  institutions,  which  are  constructed  along  the 
lines  of  a wider  social  experience.  The  older  generation 
is  satisfied  with  the  older  institutions;  the  younger  gener- 
ation, shaped  in  its  thinking  by  the  drastic  experience  of 
the  past  decade,  can  never  be  satisfied  with  anything  less 
than  a reconstructed  social  world. 

The  young  people  are  convinced  that  economic  forces 
are  fundamental ; that  economic  changes  must  precede, 
or  at  least  accompany  every  form  of  social  change,  and 
therefore  they  have  turned  their  attention  to  the  economic 
reconstruction  of  society.  In  the  present  order,  they 
recognize  the  relics  of  a past  era  of  economic  life.  Be- 
fore them  they  see  the  possibilities  of  a new  order  built 
along  more  enlightened  and  more  social  lines.  The  old 
order  has  rested  upon  competition — the  law  of  the  jungle. 
The  new  order  must  rest  upon  co-operation — the  law  of 
civilized  society.  This  co-operation  must  reach  to  the 
foundation  of  social  life.  All  of  the  economic  machin- 
ery— resources,  factories,  banks,  mercantile  establish- 
ments,— that  is  organized  socially  and  used  socially,  must 
be  socially  owned  and  socially  controlled  otherwise  the 
exploitation  incident  to  the  present  economic  system  must 
inevitably  continue. 

The  power  exercised  by  the  rulers  of  present  day 
economic  society  depends  primarily  on  their  ownership 
of  the  productive  machinery  and  on  their  control  over  the 
economic  surplus.  This  control  gives  them  a substantial 


32 


WHAT  ARE  THESE  PREMISES? 


power  over  every  phase  of  human  activity.  So  long  as 
one  small  group  of  individuals,  responsible  to  themselves 
alone,  is  permitted  to  wield  this  power,  society  cannot  be 
free  economically,  socially  or  politically. 

The  owners  of  the  nation’s  wealth  must  be  the  peo- 
ple who  depend  upon  that  wealth  for  an  opportunity  to 
work  and  for  the  necessaries  of  life.  All  of  the  economic 
power  exercised  in  society  must  be  exercised  only  when 
it  is  delegated  by  the  citizens — the  workers — who  make 
up  the  vast  majority  of  the  individuals  in  economic  so- 
ciety. 

The  masters  of  economic  life  will  not  abdicate.  They 
will  continue  their  rule,  they  will  add  to  their  power  andi 
they  will  bulwark  the  “invisible  empire”  until  all  can  see 
and  feel  its  might.  Against  this  menace,  one  thing  and 
one  thing  only  will  avail.  That  is,  the  conscious,  intelli- 
gent solidarity  of  the  workers.  This  solidarity  must  show 
itself  industrially  and  politically.  Industrially  in  the  form 
of  industrial  unionism — politically — in  the  form  of  party 
activity.  Each  worker  must  expect  to  stand  shoulder  to 
shoulder  with  his  fellows  on  the  political  field  just  as  he 
stands  with  them  shoulder  to  shoulder  on  the  industrial 
field.  Then,  as  in  England,  the  Socialist  Party  and  the 
Labor  Congress  will  meet  in  common  council  to  determine 
the  policies  upon  which  they  must  act  and  to  prepare  for 
the  final  measurement  of  strength  with  the  plutocracy. 

The  workers  must  stand  shoulder  to  shoulder  with  a 
solidarity  that  is  international  as  well  as  national.  The 
most  powerful  of  all  international  movements  today  is 
International  Socialism.  Every  man  and  woman  who 
belongs  with  the  movement  and  works  for  it,  has  a part 
in  the  mighty  organization  that  is  lining  up  the  workers 
of  every  land  to  strive  for  the  common  end,  brotherhood 
based  upon  the  foundation  of  a co-operative  common- 
wealth. 


What  Do  You  Know  About  Russia? 
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Bolshevik  Revolution 

Its  Rise  and  Meaning 

By  MAXIM  LITVINOFF. 

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marck tried  to  destroy  the  Socialist  movement  by  legislation. 
He  lived  through  it  all.  And  he  has  written  a fascinating  story 
of  the  failure  of  the  attempt  that  American  Junkers  are  think- 
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THE  ONLY  WAY 


THE  ONLY  WAY  we’ll  ever  get  Socialism  is  by  working 
for  it  UNITEDLY.  It’s  folly  to  be  a little  Socialist  Party  all 
by  yourself,  making  a little  jab  at  the  enemy  here,  giving  a 
little  slap  there,  registering  a diminutive  kick  elsewhere. 

If  we  are  ever  to  overcome  captalism;  if  we  are  ever  to  win 
the  world  for  the  workers,  we  must  grow  strong  by  UNITED 
action — the  disciplined  and  well  organized  action  of  thousands 
upon  thousands  of  workers,  all  thinking,  planning,  working  to- 
ward one  and  the  same  end. 

As  an  individual  you  can  continue  to  snap  at  the  heels  of 
capitalism  until  doomsday.  And  what  will  it  profit  you?  You’ll 
get  kicked  occasionally,  that’s  all. 

But  as  a unit  in  the  world-wide  ORGANIZED  attempt  to  end 
capitalism  and  bid  it  a glad  farewell,  you  and  the  rest  of  us 
TOGETHER  can  hit  telling  blows. 

The  only  way  is — ORGANIZATION.  Join  the  Socialist  Party. 
Pay  dues  and  attend  meetings  regularly.  Face  Forward!  Fall 
in  line!  Keep  in  step  with  the  millions  of  Socialists  who  have 
consecrated  their  lives  to  make  living  WORTH  WHILE. 

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But  when  UNITED,  wrongs  are  righted,  and  justice  comes 
to  all. 


THE  NEW 
SLAVERY 


By  SCOTT  NEARING 


‘?^ENTS 


Published  by  the 

Socialist  Party  of  the  United  States 
220  South  Ashland  Boulevard 
CHICAGO 


Copyright  1920 
by 

THE  SOCIALIST  PARTY  OF  THE  UNITED  STATES 
Chicago,  111. 


Printed  in  the  U.  S.  A. 


THE  NEW 
SLAVERY 

OR 

The  World  Made  Safe 
for  Plutocracy 

By  SCOTT  NEARING 


Author  of  “Income”,  “Wages  in  the  United  States”, 
“Reducing  the  Cost  of  Living”,  “Poverty 
and  Riches”,  “Anthracite”,  Etc. 


“The  World  must  be  made  safe  for  democracy.  Its  peace 
must  be  plajited  upon  the  tested  foundat  ons  of  political 
liberty ”.  Woodrow  Wilson , April  2,  1917. 


Published  by  the 

Socialist  Party  of  the  United  States 

CHICAGO 


WHAT  IS  SLAVERY? 


Webster’s  New  International  Dictionary — 

“Bondage;  Thralldom.” 

“Continued  and  wearisome  labor,  as  of  a slave ; drudg- 
ery.” 

Century  Dictionary — 

“A  State  of  Servitude.” 

“Entire  subjection  to  the  will  and  commands  of  an- 
other.” 

“Servitude ; drudgery.” 

New  International  Encyclopedia — 

“Legally  that  status  of  an  individual  or  individuals 
characterized  by  perpetual  and  almost  complete 
loss  of  personal  and  political  liberty.” 

New  English  Dictionary — 

“Severe  toil  like  that  of  a slave;  heavy  labor,  hard 
work,  drudgery.” 

“The  condition  or  fact  of  being  entirely  subject  to,  or 
under  the  domination  of,  some  power  of  influ- 
ence.” 


bvLn-  S-  / 5 ~QjLf4i  t 7 V/wtA  ,$£. , 


J 


Table  of  Contents. 

1.  What  Is  Slavery? 

2.  Yearning  for  Liberty. 

3.  Democracy  as  Master. 

4.  Plutocratic  Oligarchy. 

5.  Job  Slavery. 

6.  Wealth  Mastery. 

7.  Poverty  Servitude. 

8.  Finance  on  the  Throne. 

9.  Liberty  on  the  Scaffold. 

10.  Sops. 

11.  When  Is  a Slave  Not  a Slave? 

12.  The  Old  Freedom. 


THE  NEW  SLAVERY 


5 


1 . What  Is  Slavery  ? 

SLAVERY  is  involuntary  subjection  to  arbitrary  and 
irresponsible  authority.  The  social  system  that  is 
built  about  slavery  develops  a master  class  and  a 
slave  class.  The  master  class  calls  the  tune;  the  master 
class  enjoys  the  music,  and  the  slave  class  pays  the  bill. 

Lincoln  once  said  that  no  man  is  good  enough  to  rule 
another  man  without  that  man’s  consent.  In  other  words, 
no  human  being  should  be  a master  over  another  human 
being  who  is  bound  to  the  master  under  a system  of  in- 
voluntary servitude. 

Any  social  system  that  enables  one  man  to  rule  over 
another  man  without  his  consent  is  a slave  system.  The 
methods  of  the  masters  change.  The  devices  by  which  one 
man  exercises  arbitrary  and  irresponsible  authority  over 
another  differ  in  different  periods  of  the  world’s  history. 
Social  systems  built  upon  involuntary  subjection  have  ap- 
peared in  many  ages  and  in  many  forms. 

The  age  is  incidental.  The  form  is  unimportant. 
Wherever  one  group  of  human  beings  succeeds  in  estab- 
lishing sovereignty  (the  right  to  rule)  over  another  group 
of  human  beings,  without  their  consent,  a slave  system  has 
been  inaugurated.  Called  by  whatever  name,  foisted  upon 
the  people  by  whatever  fine  sounding  phrases,  involuntary 
servitude  is  involuntary  servitude,  and  (except  as  a pun- 
ishment for  certain  forms  of  crime)  involuntary  servitude 
is  slavery. 


6 


THE  NEW  SLAVERY 


The  master  orders  and  directs ; the  slave  obeys.  The 
slave  has  little  or  no  say  in  picking  his  master ; the  master, 
however,  picks  the  slave.  The  slave  is  not  consulted  as  to 
what  he  would  like  to  do.  He  is  told  what  to  do.  It  is 
the  master  who  decides  questions  of  policy.  The  slave  has 
no  voice  in  such  matters.  The  property,  the  happiness,  the 
liberty,  the  very  life  of  the  slave  is  at  the  master’s  mercy. 

Any  system  of  social  organization  that  gives  one 
group  of  men,  directly  or  indirectly,  the  power  to  make 
decisions  for  another  group  of  men  is  a slave  system.  It 
permits  one  man  to  rule  another  without  his  consent. 

Through  the  ages  one  set  of  clever  men  has  schemed 
and  plotted  to  secure  arbitrary  power  over  the  remainder 
of  the  community.  Once  established,  this  power  has  been 
perpetuated  through  some  device  that  enabled  the  master 
to  hand  the  right  of  mastery  from  father  to  son. 

Through  the  ages  other  men  have  arisen,  proclaiming 
liberty,  demanding  justice  and  insisting  upon  the  over- 
throw of  the  system  of  slavery.  To  them  the  common 
people  have  listened  very  gladly,  because  the  great  pulsing 
heart  of  the  human  race  revolts  against  injustice,  despot- 
ism and  tyranny  as  eagerly  as  it  welcomes  justice  and  lib- 
erty. 

The  worst  enemy  of  slavery  is  the  belief  that  slavery 
is  wrong.  The  greatest  asset  of  democracy  is  the  love  of 
liberty  which  is  met  with  wherever  men  live  and  labor. 

The  spreading  of  knowledge,  the  awakening  of  intel- 
ligence, the  broadening  of  vision  among  the  common 
people  of  the  world  is  showing  results.  Democracy  makes 
a stronger  appeal  to  men  than  does  despotism.  Demo- 
cratic institutions,  which  spell  opportunity  and  happiness 
for  the  human  race,  will  be  forced  upon  the  masters  of 
the  world  just  as  soon  as  the  common  people  realize  that 
any  slave  system  is  a failure  because  it  is  a slave  system, 
and  that  the  remedy  for  slavery  is  democracy. 


THE  NEW  SLAVERY 


7 


2.  Yearning  for  Liberty. 

THE  yearning  for  liberty  is  one  of  the  strongest  of 
human  impulses.  All  men  feel  it.  Some  are  domi- 
nated by  its  power.  Others  are  able  to  ignore  its  urge 
in  the  rush  of  everyday  life,  but  when  the  issue  is  squarely 
presented  and  clearly  seen,  men  love  liberty  as  dearly  as 
they  love  anything  else  in  the  world. 

Through  the  ages  mankind  has  sought  truth  and  j us- 
tice.  At  every  hand  the  powers  of  vested  interests  have 
resisted,  but  little  by  little  the  battle  has  been  won.  Grad- 
ually the  darkness  of  ignorance  has  been  thrust  aside  by 
the  glimmerings  of  knowledge  that  have  made  their  way 
through  the  murk  and  the  gloom. 

That  eternal  vigilance,  which  is  said  to  be  the  price 
of  liberty,  is  encountered  wherever  human  society  has  left 
a record.  At  one  point  the  forces  of  liberty  seem  to  be 
winning.  At  another,  liberty  and  truth  are  being  ruth- 
lessly crushed  to  earth  by  the  power  of  the  privileged  mas- 
ters of  life.  The  struggle  goes  on — eternally.* 

The  struggle  must  go  on.  Otherwise  there  is  no  hope 
and  no  progress. 

The  standards  of  liberty  and  justice  have  never  yet 
been  well  formulated.  Always  they  are  inadequate  and 
incomplete.  Each  group,  each  age  in  history,  has  its  own 
ideas  as  to  what  liberty  and  justice  really  means.  One  age 


♦Jupiter  has  conquered  the  world  and  has  overwhelmed  the 
human  race  with  every  sort  of  suffering,  yet  he  finds  that — 

“The  soul  of  man,  like  unextinguished  fire, 

Yet  burns  toward  heaven  with  fierce  reproach  and  doubt, 

And  lamentation  and  reluctant  prayer, 

Hurling  up  insurrection.” 

Shelley’s  “Prometheus  Unbound,”  Act  III,  Scene  1. 


8 


THE  NEW  SLAVERY 


sets  an  ideal.  The  next  works  it  out  in  tangible  form  and 
the  ideal  is  pushed  forward. 

Perfect  liberty  may  never  be  attained.  There  may  be 
no  such  thing  for  the  human  race  as  absolute  justice. 
Liberty  and  justice,  in  their  finality,  exist  in  the  human 
heart,  but  they  are  none  the  less  real. 

Indeed,  they  are  in  a sense  more  potent,  lying  thus 
in  immortal  embryo,  than  they  would  be  as  tangible  insti- 
tutions. Institutions  are  brought  into  being,  perfected, 
kept  past  their  time  of  highest  usefulness  and  finally  dis- 
carded. The  hopes  of  men  spring  eternally,  spontaneously 
from  the  soul,  forming  the  true  social  immortality. 

The  human  belief  in  liberty  and  justice  manifests  it- 
self everywhere.  There  is  no  society,  however  primitive, 
which  does  not  present  a picture  of  the  individual,  de- 
manding and  in  general  receiving,  a square  deal  from  his 
fellows. 

The  human  yearning  for  liberty  and  justice,  so  power- 
ful in  the  case  of  the  individual,  thus  becomes  a dynamic, 
positive  force  in  human  life.  Offer  any  man  in  modern 
western  society  double,  treble,  or  quadruple  his  wages  if 
he  will  sell  himself  or  his  children  into  chattel  slavery. 
A few  will  accept,  but  the  great  majority  will  refuse  imme- 
diately and  unquestioningly. 

The  struggle  which  has  been  waged  in  the  Western 
World  against  body  slavery  is  only  less  significant  than 
the  struggle  against  mind  slavery.  The  vested  power  of 
the  mediaeval  state  and  church  insisted  upon  both.  The 
exacting  individualism  of  Western  Europe  refused  to  be 
bound  by  tradition  and  privilege.  For  centuries  the  con- 
test was  waged  first  for  the  right  of  liberty  in  belief ; then 
for  the  right  of  liberty  in  thought.  Protestantism  and 
science  were  the  children  of  the  struggle  that  has  left  its 
impress  on  the  face  of  the  world. 

There  is  not  a social  group,  however  primitive,  in 
which  men  do  not  demand  liberty  and  justice  according 


THE  NEW  SLAVERY 


9 


to  their  lights.  The  impulse,  the  yearning,  the  passionate 
resolve  are  all  three  tugging  at  the  human  heart.  Some- 
times they  win;  sometimes  they  lose,  but  they  are  ever 
ready  for  a new  trial  of  strength.* 


*The  case  is  well  stated  in  the  following  poem  which  refers  to  the 
Irish  Revolutionists  of  1914-1915: 

“THE  DUBLIN  EXECUTION” 

“Pray  every  man  in  his  abode 

And  let  the  church  bells  toll, 

For  those  who  did  not  know  the  road, 

But  only  saw  the  goal. 

“Let  there  be  weeping  in  the  land 
And  Charity  of  mind 
For  those  who  did  not  understand, 

Because  their  love  was  blind. 

“Their  errant  scheme  that  we  condemn, 

All  perished  at  a touch; 

But  much  should  be  forgiven  them 
Because  they  loved  much. 

“Let  no  harsh  tongue  applaud  their  fate, 

Or  their  clean  names  decry, 

The  men  who  had  no  strength  to  wait, 

But  only  strength  to  die.” 

An  anonymous  poem  published  in  the  “Public,”  January  9,  1917. 


10 


THE  NEW  SLAVERY 


3.  Democracy  as  Master . 

DEMOCRACY  was  intended  to  provide  a means  of  run- 
ning public  affairs  that  would  insure  the  greatest 
degree  of  liberty  compatible  with  the  perpetuation 
of  society. 

Special  privilege  government  had  been  government  by 
an  artificially  selected  and  artificially  perpetuated  minor- 
ity. Utilitarians  placed  the  emphasis  on  the  greatest  good 
to  the  greatest  number — of  people,  not  of  acres — and  the 
ideal  of  democracy  was  this  ideal  of  serving  the  masses  of 
mankind. 

Democracy  was  organized  to  insure  liberty. 

During  the  late  years  of  the  Eighteenth  Century 
Democracy  was  on  the  tip  of  the  world’s  tongue.  The 
choice  was  a choice  of  “liberty  or  death.” 

The  idea  of  liberty  was  a part  of  the  heritage  of  the 
Eighteenth  Century  world.  The  very  spot  at  which  the 
idea  took  tangible  form  in  the  United  States — Independ- 
ence Hall — houses  the  bell  that  is  supposed  to  have  rung 
out  the  news  of  the  signing  of  the  Declaration  of  Inde- 
pendence, dubbed  “Liberty  Bell,”  and  is  an  object  of  ven- 
eration among  the  American  people. 

According  to  the  ideals  of  those  early  democrats,  no 
man  was  good  enough  to  rule  another  man  without  that 
man’s  consent.  The  just  powers  of  government  were  to 
be  derived  from  the  consent  of  the  governed.  There  was 
the  “tyranny  of  the  majority,”  which  still  survived, — a 
tyranny  that  could  be  exercised,  however,  only  subject  to 
the  sense  of  fair  play  in  the  community.  Majority  rule 
does  not  insure  perfect  liberty.  That  cannot  be  attained 
until  all  men  learn  to  govern  themselves.  Majority  power 


THE  NEW  SLAVERY 


11 


in  a democracy  is,  however,  a long  step  forward  from  the 
minority  government  of  feudal  Europe. 

The  American  colonists  had  fled  to  escape  religious 
and  political  tyranny  in  the  mother  countries.  They  had 
drunk  the  cup  of  its  bitterness  in  the  long  contest  with 
England  over  the  rights  of  taxation,  of  commerce,  of  man- 
ufacture, and  of  local  political  control.  They  had  their 
fill  of  a mastery  built  upon  the  special  privilege  of  an 
aristocratic  minority.  It  was  liberty  and  justice  that  they 
sought;  hence  they  dedicated  their  new  government  to 
those  ideals  of  liberty  and  justice  which  play  so  large  a 
part  in  the  spiritual  life  of  mankind. 

The  matter  was  stated  strongly  and  clearly  by  Presi- 
dent Woodrow  Wilson  in  a series  of  addresses  delivered 
during  January  and  February,  1916.  At  Pittsburgh  the 
President  said : “We  want  American  character  to  display 
itself  in  what  I may  perhaps  be  allowed  to  call  spiritual 
efficiency — clear,  disinterested  thinking  and  fearless  ac- 
tion along  the  right  lines  of  thought.  America  is  nothing 
if  it  consists  merely  of  each  of  us ; it  is  something  only  if 
it  consists  of  all  of  us,  and  it  cannot  consist  of  all  of  us 
unless  our  spirits  are  banded  together  in  a common  enter- 
prise. That  common  enterprise  is  the  enterprise  of  liberty 
and  justice  and  right.”* 

“America  was  born  into  the  world  to  do  mankind 
service,  and  no  man  is  a true  American  in  whom  the  desire 
to  do  mankind  service  does  not  take  precedence  over  the ' 
desire  to  serve  himself.  If  I believed  that  the  might  of 
America  was  a threat  to  any  free  man  in  the  world,  I 
would  wish  America  to  be  weak,  but  I believe  the  might 
of  America  is  the  might  of  righteous  purpose  and  of  a 
sincere  love  for  the  freedom  of  mankind.”! 

At  another  point,  referring  to  the  flag,  the  President 
said:  “That  flag  was  originally  stained  in  very  precious 

♦Addresses  of  President  Wilson,  House  Document,  803,  64th  Con- 
gress, 1st  Session,  Washington,  1916,  p.  13. 

flbid,  p.  17. 


12 


THE  NEW  SLAVERY 


blood,  blood  spilt,  not  for  any  dynasty,  nor  for  any  small 
controversies  over  national  advantage,  but  in  order  that  a 
little  body  of  three  million  men  in  America  might  make 
sure  that  no  man  was  their  master.”* 

Democracy  attempted  to  emancipate  itself  from  the 
old  forms  of  mastery  and  give  to  all  an  equal  opportunity 
for  life,  liberty  and  the  pursuit  of  happiness.  Men  wished 
to  be  freed  from  the  old  tyrannies  and  slaveries.  If  any- 
one was  to  rule,  he  must  rule  only  by  the  consent  of  those 
over  whom  his  authority  lay,  and  he  must  exercise  that  au- 
thority only  while  he  employed  it  for  service. 

The  early  Americans  pledged  their  lives,  their  fort- 
unes, and  their  sacred  honor  to  the  guarantee  of  liberty 
and  justice — to  the  overthrow  of  despotism  and  tyranny. 


*Ibid,  p.  18. 


THE  NEW  SLAVERY 


13 


4.  Plutocratic  Oligarchy, 

SUCH  was  the  theory — of  freedom  from  mastery — and 
it  rang  with  a note  of  sincerity  and  power  that 
aroused  monarchical  Europe  when  it  was  enunciated 
in  France,  to  protest,  hostility  and  war.  Here,  in  the 
United  States,  democracy  maintained  itself,  but  through 
the  years  there  have  developed  new  forms  of  authority, 
special  privilege,  mastery,  despotism  and  tyranny,  until 
it  becomes  necessary  to  examine  once  again  the  meaning  of 
“mastery”  and  of  “slavery”  and  to  decide  what  steps  must 
be  taken  to  make  good  the  pledge  of  “liberty,  equality,  fra- 
ternity,” that  Eighteenth  Century  democracy  gave  to  the 
world. 

Democracy  was  to  guarantee  to  all  men  popular  con- 
trol of  public  affairs,  to  eliminate  special  privilege,  and 
provide  for  all  equal  opportunity  for  life,  liberty  and  the 
pursuit  of  happiness.  In  reality,  after  a century  and  a 
half  of  the  political  democracy  that  grew  out  of  the  agita- 
tions of  the  Eighteenth  Century  we  are  in  the  grip  of 
forces  that  exercise  autocratic  power  over  public  and  priv- 
ate affairs. 

Big  business  is  everywhere  in  the  saddle  dominating 
and  dictating.  Special  privilege,  built  upon  the  private 
control  of  the  resources  and  the  machinery  of  production, 
rules  cities,  states  and  nations.  Liberty,  equality  and  fra- 
ternity have  been  swallowed  up  in  the  mad  battle  for  com- 
mercial supremacy  and  economic  power.  The  government 
machinery  has  been  tampered  with.  Executives,  legis- 
latures, and  courts  have  repeatedly  and  in  well  authenti- 
cated instances,  yielded  their  authority  to  the  industrial 
interests. 

Wage  earners  and  clerks,  in  industrial  centers,  com- 
prise five-sixths  of  the  gainfully  occupied  people  of  the 


14 


THE  NEW  SLAVERY 


community.  Yet  the  individual  wage-earner  or  clerk  works 
for  a business  to  which  he  gives  the  best  of  his  time  and 
energy  and  in  which  he  has  no  voice.  With  the  exception 
of  a small  percentage  of  wage  earners  and  clerks  who 
belong  to  unions,  they  do  not  even  have  a voice  in  deciding 
upon  the  wages,  hours  and  other  conditions  of  their  own 
employment. 

Many  of  the  great  industries  dictate  politically  to  em- 
ployees— refusing  to  allow  them  to  participate  in  social- 
istic or  other  “radical”  political  activities ; lining  up  their 
votes  on  election  day;  forcing  them  into  political  demon- 
strations, like  the  preparedness  parades  of  1916,  and  thus 
coercing  them  outside  of  the  field  of  their  business  con- 
nections,— going,  in  fact,  behind  business  relations  into 
the  civic  interests  and  private  lives  of  their  workers. 

Meanwhile  the  resources,  capital,  credit  machinery, 
productive  tools,  and  more  important  still,  the  avenues 
for  the  control  of  public  opinion  are  in  the  hands  of  the 
men  who  exercise  this  authority  over  political  and  private 
life. 

When  does  one  man  “rule  over”  another  ? 

What  is  mastery? 

Does  the  man  who  controls  your  opportunity  to  work, 
your  working  time,  your  political  activities,  your  public 
utterances,  your  right  to  organize  industrially  and  politi- 
cally, the  utterances  of  your  minister,  the  reading  matter 
that  appears  in  your  newspapers  and  magazines  and  the 
course  of  study  that  is  given  to  your  children  by  teachers 
of  his  selection  in  the  school — does  such  a one  exercise 
mastery  over  you?  Was  arbitrary  and  irresponsible 
power  ever  more  complete?  Exercising  such  arbitrary 
and  irresponsible  power,  ruling  over  the  lives  of  tens  of 
millions  without  their  consent,  the  masters  of  modern  life 
are  in  control  of  a system  of  slavery  more  complete  and 
effective  than  any  that  has  ever  preceded  it.  Roman  im- 


15 


THE  NEW  SLAVERY 

perialism  was  petty  and  weak  when  compared  with  mod- 
ern plutocratic  oligarchy. 

Americans,  with  their  customary  good-natured  intel- 
lectual indolence,  have  taken  it  for  granted  that  having 
shaken  off  the  fetters  of  serfdom  in  Europe  and  the 
shackles  of  Negro  slavery  in  this  country,  they  were  free. 
Well,  free  from  what? 

Mastery  has  always  been  based  upon  some  form  of 
ownership.  There  is  a group  in  the  United  States  growing 
in  size— of  people  who  take  more  in  keep  than  they  give 
in  service ; people  who  own  land,  who  own  franchises,  who 
own  stocks,  bonds,  mortgages,  and  other  titles  to  property, 
-and  many  of  those  people  are  living  without  ever  lifting 
a finger  in  toil,  or  giving  a return  in  service  for  the  living 
they  get.  Those  people  are  parasites.  They  are  the  own- 
ers of  the  productive  machinery  with  which  their  fellows 
must  work  in  order  to  live.  Because  they  own  railroad 
and  telephone  lines,  land  and  capital,  they  can  say  to  other 
people,  “If  you  wish  to  use  these  things,  you  pay  me  a 
return ; you  pay  me  an  income  or  levy  on  my  ownership. 

Historically  there  have  been  a number  of  stages  in 
the  development  of  mastery.  First,  there  was  the  owner- 
ship of  the  body.  A man  owned  another  man,  and  he  took 
a whip  to  him,  if  necessary,  saying,  “You  work  for  me,  you 
toil  and  work  and  earn  bread  and  I will  eat  it.  That  was 
the  first  form  of  economic  mastery.  There  the  master 
owned  not  the  tools  of  production,  but  the  human  element 
in  production.  He  owned  the  man  himself. 

Then  in  another  stage,  the  owner  of  the  land,  the 
feudal  baron  or  the  landlord,  said  to  the  tenant  who 
worked  on  his  land : “You  toil  and  work  and  stay  on  my 
land.  You  create  bread  and  I will  eat  it.”  That  was  the 
feudal  stage,  under  which  the  nobility  and  the  clergy  ex- 
ercised a mastery  over  the  rest  of  the  community , by  living 
upon  the  work  that  the  rest  of  the  community  performed. 


16 


THE  NEW  SLAVERY 


Now  we  have  passed  to  another  stage  where  the  own- 
ers own  the  land,  and  the  rights  to  the  land,  called  fran- 
chises, and  the  tools  with  which  men  work,  called  capital, 
and  owning  the  land,  and  owning  the  franchises,  and  own- 
ing the  capital,  they  have  control,  through  their  title  deeds, 
of  the  means  by  which  their  fellowmen  earn  a living — they 
own  the  job.  That  is  capitalism.  Capitalism  means  that 
certain  individuals  in  the  community  own  the  means  of 
livelihood;  own  the  tools,  the  machines  and  the  land,  on 
which  their  fellowmen  must  work  in  order  to  live. 

Here  is  hunger  and  ambition,  driving,  pulling,  calling 
people  to  produce  the  means  of  satisfying  their  desires, 
and  yonder,  the  land  and  capital,  the  means  with  which 
desires  are  satisfied.  Hunger  and  ambition  are  pushing 
and  calling  men,  and  the  means  of  satisfying  hunger  and 
ambition  are  in  the  hands  of  a group  in  the  community 
who  are  owners  of  capital.  And  the  capitalists  say  to 
those  driven  by  hunger  and  ambition : “You  toil  and  work 
and  earn  bread  and  we  will  eat  it.”  They  own  the  job! 
They  own  the  right  to  work.  They  have  it  in  their  power 
to  say:  “You  may  work;  you  may  not  work.”  Therefore, 
owning  the  jobs,  controlling  the  means  to  a livelihood,  they 
are  in  a position  where  they  can  exact  as  their  share  a part 
of  the  product  of  those  who  work  at  the  j obs  without  them- 
selves rendering  any  service  in  any  particular  to  their  fel- 
lowmen. 

You  may  hold  a piece  of  land  on  the  outskirts  of  Chi- 
cago. You  may  have  bought  it  for  a nominal  sum.  You 
may  never  have  improved  it  an  iota.  You  may  simply 
have  held  it  and  paid  incidental  taxes  on  it,  and,  year  after 
year,  the  people  have  toiled  for  the  land  value,  and  today, 
the  land  you  bought  for  a hundred  dollars  an  acre  sells  for 
ten  thousand.  The  people  of  Chicago  have  produced  the 
value;  you  take  it.  You  may  have  lived  in  New  Orleans, 
or  San  Francisco,  or  Portland,  Maine,  while  that  value  was 
increasing.  The  increase  has  taken  place  and  you  appro- 


THE  NEW  SLAVERY 


17 


priate  the  surplus  value.  You  live  off  the  work  done  by 
other  people. 

You  hold  ten  thousand  dollars  in  railroad  bonds — 
whether  you  beg  it  or  borrow  it  or  steal  it  or  earn  it,  or 
inherit  it,  or  find  it,  whatever  you  please — it  yields  you 
five  hundred  dollars  a year  income,  and  you  hand  it  on  to 
your  son,  and  it  yields  him  five  hundred  dollars  a year  in- 
come. And  for  generation  after  generation,  these  title 
deeds  can  be  handed  from  father  to  son, — title  deeds  that 
enable  the  owners  to  levy  a tax  upon  the  remainder  of  the 
people  in  return  for  their  ownership. 

The  present  system  of  mastery  is  based  on  the  owner- 
ship by  one  group  of  people  of  the  things  upon  which  an- 
other group  of  people  depend  for  their  living.  The  mas- 
ters of  present  day  society  have  in  their  possession  the 
natural  resources,  the  tools,  the  franchises,  the  patents, 
and  the  other  phases  of  the  modern  industrial  system  upon 
which  so  many  depend  for  the  opportunity  of  earning  a 
living. 

The  chance  to  work  today  means  livelihood  and  life. 
The  man  who  cannot  find  a job  cannot  exist  outside  of 
the  poorhouse  or  the  jail.  Jobs  are  the  means  through 
which  the  modern  man  secures  income — the  key  to  life. 

When  each  man  owned  his  own  job, — the  farm-owner, 
the  store-owner,  the  owner  of  a little  blacksmith  shop  or 
shoe-shop,  or  bake-shop, — he  was  his  own  master.  The  job 
was  his,  just  as  the  tools  of  his  trade  were  his. . 

Modern  jobs  are  highly  complex  and  are  organized  on 
an  immense  scale.  The  telephone  and  railroad  systems; 
the  huge  financial  institutions;  the  great  manufacturing 
and  mining  enterprises  are  no  longer  one-man  concerns. 
The  railroads  of  the  country,  with  less  than  five  thousand 
general  officers,  provide  jobs  for  more  than  a million  and 
a half  people.  The  last  census  showed  that  there  were 
1,996  manufacturing  plants  in  the  United  States,  each  of 
which  had  more  than  500  job-holders  on  its  pay  roll.  The 


18 


THE  NEW  SLAVERY 


total  of  the  jobs  offered  by  these  1,996  establishments  was 
2,182,187. 

The  modern  job — the  chance  to  work — is  a little  unit 
in  a big  machine.  The  man  who  owns  the  big  machine 
owns  the  little  individual  job,  and  he  dictates  to  the  job- 
holder the  conditions  of  his  working  life,  and  many  of  the 
conditions  of  his  life  out  of  working  hours. 

Unlike  the  slave  owner  and  the  feudal  lord,  the  mod- 
ern job-owner  has  no  responsibility  to  the  job-holder.  The 
slave  owner  had  to  feed,  clothe  and  house  his  slave — other- 
wise he  lost  his  property.  The  feudal  lord  had  to  protect 
and  assist  his  tenant.  That  was  a part  of  his  bargain  with 
his  overlord.  The  modern  job-owner  is  at  liberty,  at  any 
time,  to  sever  his  connection  with  the  job-holder,  and  by 
throwing  him  out  of  work  take  away  his  chance  of  earning 
a living.  While  he  keeps  the  job-holder  on  his  pay  roll,  he 
may  pay  him  impossibly  low  wages,  overwork  him  under 
conditions  that  are  unfit  for  the  maintenance  of  decent 
human  life.  Barring  feeble  factory  laws  and  health  laws, 
he  is  at  liberty  to  impose  on  the  job-holder  any  form  of 
treatment  that  the  job-holder  will  tolerate. 


THE  NEW  SLAVERY 


19 


5.  Job-Slavery. 

JOB-OWNING  is  the  latest  and  probably  the  most  com- 
plete system  of  mastery  ever  perfected.  It  is  mar- 
velous in  its  thoroughgoing  effectiveness.  Chattel- 
slavery  involved  merely  the  ownership  of  the  body.  The 
mind  and  the  conscience  were  free.  The  chattel  slave  was 
held  in  physical  bondage — a very  ineffective,  unsatisfac- 
tory method  of  control.  Everywhere  this  kind  of  slavery 
has  broken  down  of  its  own  weight. 

Behind  serfdom  there  was  land  ownership  and  a re- 
ligious sanction.  “Divine  right,”  “God’s  anointed,”  “The 
Supreme  Will”  were  used  to  bulwark  the  position  of  the 
owning  class.  The  system  involved  heavy  responsibilities 
however,  and  laid  them  upon  the  shoulders  of  a group — 
the  aristocracy, — who  were,  as  a rule,  unable  to  bear  them 
wisely  or  well. 

Job-ownership  owes  its  effectiveness  to  a subtle  psy- 
chological power  that  overwhelms  the  unconscious  victim, 
making  him  a tool,  at  once  easy  to  handle  and  easy  to  dis- 
card. The  system  of  private  ownership  that  succeeded  feu- 
dalism taught  the  lesson  of  economic  ambition  so  thor- 
oughly that  the  idea  has  gripped  the  whole  western  world. 
The  conditions  of  this  Eighteenth  Century  life  have 
passed,  perhaps  forever,  but  its  psychology  lingers  every- 
where. The  job-holder  has  been  taught  that  he  must  get 
ahead  in  the  world ; that  if  he  practices  the  economic  vir- 
tues— thrift,  honesty,  earnestness,  persistence,  efficiency 
— he  will  necessarily  receive  great  economic  reward ; that 
he  must  support  his  family  in  the  standard  set  by  the 
community,  and  that  to  do  all  of  these  essential  things,  he 
must  take  a job  and  hold  on  to  it.  Having  taken  the  job, 
he  finds  that  in  order  to  hold  it,  he  must  be  faithful  to 
the  job-owner,  even  if  that  involves  faithlessness  to  his 


20 


THE  NEW  SLAVERY 


own  ideas,  his  own  ideals  and  even  his  own  comrades.  In 
other  words,  to  keep  his  body  comfortable  and  his  family 
respectable,  he  must  be  ready  to  prostitute  his  mind  and 
frequently  barter  away  his  soul. 

The  fierceness  and  power  of  the  industrial  machine 
grips  men,  overwhelms  them,  destroys  them.  As  G.  Lowes 
Dickinson  puts  it  in  his  “Letters  of  a Chinese  Official” : 
“Your  capital  is  alive.  You  produce,  not  because  you  will 
but  because  you  must.  * * * You  have  liberated 

forces  you  cannot  control;  you  are  caught  yourselves  in 
your  own  levers  and  cogs.” 

The  driving  power  in  chattel  slavery  was  the  lash. 
Under  serfdom  it  was  the  fear  of  hunger.  The  modern 
system  of  job-ownership  owes  its  effectiveness  to  the  fact 
that  it  has  built  upon  the  most  potent  driving  force  in  all 
the  world — the  driving  force  of  a man’s  ambition — the 
driving  force  that  comes  from  within  the  man  himself. 
Thus  job-owning,  built  upon  an  automatic  self-drive  prin- 
ciple, enables  the  job  owner  to  exact  an  immensely  valu- 
able return  in  faithful  service  that  neither  chattel  slavery 
nor  serfdom  ever  made  possible.  Job-owning  is  thus  the 
most  thorough-going  form  of  mastery  yet  devised  by  the 
ingenuity  of  man. 

The  job-owner  enjoys  the  fruits  of  the  job-taker’s  labor. 
As  Kipling  puts  it,  in  his  striking  poem,  “The  Sons  of 
Martha,”  the  job  takers  stand  “wary  and  watchful  all 
their  days,  that  their  brethren’s  days  may  be  long  in  the 
land.”  One  of  the  most  effective  contrasts  between  the 
modern  job-owner  and  the  job-taker  is  contained  in  a little 
poem  by  Carl  Sandburg,  called  “Child  of  the  Romans”: 

The  dago  shovelman  sits,  by  the'  railroad  track 
Eating  a noon  meal  of  bread  and  bologna. 

A train  whirls  by,  and  men  and  women  at  tables 
Alive  with  red  roses  and  yellow  jonquils, 

Eat  steaks  running  with  brown  gravy, 

Strawberries  and  cream,  eclairs  and  coffee. 


THE  NEW  SLAVERY 


21 


The  dago  shovelman  finishes  the  dry  bread  and  bologna, 

Washes  it  down  with  a dipper  from  the  water-boy, 

And  goes  back  to  the  second  half  of  a ten-hour  day’s  work 

Keeping  the  road-bed  so  the  roses  and  jonquils 

Shake  hardly  at  all  in  the  cut  glass  vases 

Standing  slender  on  the  tables  in  the  dining  cars.” 

For  the  job-owner,  steaks,  brown  gravy,  strawberries 
and  cream,  eclairs  and  coffee;  for  the  job-taker  dry  bread 
and  bologna. 

Job  owning  is  not  without  its  dangers,  however,  and 
these  dangers  lurk  in  the  system  itself. 

The  job-holder  must  be  intelligent  in  order  to  be  effi- 
cient. If  he  is  allowed  to  become  too  intelligent,  however, 
he  may  overturn  the  whole  system  of  the  private  owner- 
ship of  the  job,  and  insist  on  owning  his  own  job  again. 

On  the  other  hand,  if  the  job-holder  becomes  too  much 
of  a routineer,  he  will  be  a mere  creature  of  custom,  unable 
either  to  suggest  or  to  initiate  improvements,  and  the 
scheme  will  collapse  of  its  own  weight. 

These  dangers  have  lurked  in  every  form  of  mastery 
and  they  are  doubly  great  in  the  modern  system  of  job- 
ownership,  because  of  the  relatively  high  intelligence 
which  it  demands  and  the  immensely  great  specialization 
that  is  involved  in  its  maintenance. 

Job-ownership  is  built  of  necessity  on  the  ownership 
of  land,  resources,  capital,  credit,  franchises  and  other 
special  privileges.  Its  power  of  control  goes  far  beyond 
mere  ownership  into  the  realms  of  social  psychology. 

The  early  colonists,  who  fled  from  the  economic,  polit- 
ical, social  and  religious  tyranny  of  feudalism,  believed 
that  liberty  and  freedom  from  unjust  mastery  lay  in  the 
private  ownership  of  the  job.  They  had  no  thought  of  the 
modern  industrial  machine. 


22 


THE  NEW  SLAVERY 


The  abolitionists  who  fought  slavery  believed  that 
freedom  and  liberty  could  be  obtained  by  unshackling  the 
body.  They  did  not  foresee  the  power  of  a shackled  mind. 

The  modern  world,  seeking  freedom,  yearning  for  lib- 
erty and  justice,  aiming  at  the  overthrow  of  the  mastery 
that  goes  with  irresponsible  power,  finds  to  its  dismay 
that  the  ownership  of  the  job  carries  with  it,  not  only  eco- 
nomic mastery,  but  political,  social  and  even  religious  mas- 
tery, as  well.  Our  ancestors  sacrificed,  fought,  and  died 
in  order  to  be  sure  that  no  man  was  their  master.  Their 
descendants  seem  to  have  forgotten  that  eternal  vigilance 
is  the  price  of  liberty. 


THE 


NEW  SLAVERY 


23 


6,  Wealth  Mastery, 

THE  economic  forces,  during  the  past  few  decades, 
have  rushed  America,  with  the  remainder  of  the  west- 
ern world,  toward  a wealth  abundance  undreamed  of 
in  the  past.  The  wealth  is  here — for  the  taking — for  the 
making.  The  tools  are  here  with  which  to  make  wealth 
in  vaster  proportions  than  at  any  previous  time  in  the  his- 
tory of  mankind. 

During  one  short  century  in  the  United  States,  during 
the  years  that  have  passed  since  the  mushroom  growth  of 
manufacturing  that  followed  the  stoppage  of  trade  during 
the  war  of  1812,  the  system  of  home  manufacturing  has 
given  place  to  factory  industry.  The  newness  of  the  conti- 
nent, the  abundance  of  the  resources  and  the  daring,  ad- 
venturous spirit  of  the  early  settlers,  made  the  develop- 
ment in  the  United  States  particularly  rapid.  The  com- 
munity was  increasing  in  numbers  by  birth  and  immigra- 
tion; resources  were  being  turned  speedily  into  usable 
forms, — men  had  only  to  reach  out  and  touch  a thing, 
when  it  seemed  to  turn  into  gold. 

Machinery,  which  is  merely  man’s  power,  supple- 
mented and  multiplied  by  the  powers  and  forces  of  nature, 
produced  enough  for  all  and  to  spare.  With  the  newly 
developed  factory  and  agricultural  machinery,  with  the 
railroads  and  the  printing  presses,  there  seemed  to  be  no 
good  reason  why  there  should  not  be  food  for  every  mouth 
and  clothing  and  shelter  for  every  body.  The  cotton  gin 
made  it  possible  to  clothe  the  world;  the  reaper,  binder, 
thresher  and  railroad  make  it  possible  to  feed  the  world. 
What  more  could  anyone  desire?  Only  this  one  thing — 
that  the  world  be  properly  clothed  and  housed.  But  that 
has  never  happened. 


24 


THE  NEW  SLAVERY 


The  increase  of  American  wealth  has  been  phenom- 
enal. From  seven  billions  in  1850,  the  valuation  of  real 
and  personal  property  had  leaped  to  250  billions  by  1918 — 
a thirty-six  fold  increase  over  a period  of  sixty-seven  years 
during  which  the  population  increased  but  four  fold. 

More  important  than  the  total  amount  of  American 
wealth  is  the  fact  that  so  large  a proportion  of  it  is  in  the 
form  of  productive  machinery.  While  land  values  are  by 
far  the  largest  single  element  in  this  estimate  of  total  na- 
tional wealth,  machinery — in  factories,  transportation 
(businesses),  on  farms  and  in  mines  is  a factor  of  great 
importance  in  the  total  national  wealth. 

Equally  significant  with  the  increase  of  national 
wealth  has  been  the  increase  of  investable  surplus.  There 
is  no  way  of  gauging  this  increase  accurately.  Some  idea 
of  it  may  be  gained  from  bank  deposits,  insurance  state- 
ments, foreign  and  domestic  investments  and  the  like. 
Throughout  the  western  world  the  increase  in  investment 
capital  during  the  past  fifty  years  has  been  extraordinary. 
Great  Britain,  France,  Belgium  and  Holland  have  led  the 
world  in  this  regard,  but  the  early  years  of  the  twentieth 
century  found  the  United  States  forging  to  the  front  as  a 
nation  with  surplus  wealth.  The  European  war  gave  the 
United  States  an  even  greater  impetus  in  this  direction. 

The  United  States,  until  the  past  few  years,  has  been 
a borrowing  nation,  for,  in  spite  of  her  vast  increase  in 
wealth  and  in  surplus,  her  needs  have  outstripped  her  pos- 
sible productive  power.  This  period  in  American  economic 
history  is  rapidly  passing,  however,  and  the  country  is 
joining  hands  with  the  other  great  nations  that  are  en- 
gaged in  the  business  of  foreign  investment. 

The  surplus  wealth  of  the  nation — that  part  which  re- 
mains after  the  workers,  the  owners  of  raw  materials,  and 
all  of  the  others  have  used  what  they  needed,  or  what  they 
could  get,  is  concentrated,  for  the  most  part,  in  the  hands 
of  a very  few  owners  6f  wealth  and  controllers  of  wealth- 


THE  NEW  SLAVERY 


25 


power.  Theoretically  the  man  who  saves  $50  and  places 
it  in  a saving-fund  owns  the  money.  Practically,  that 
money  becomes  a source  of  power  in  the  hands  of  the 
banker,  of  the  business  man  who  comes  to  borrow  and  of 
those  who  control  both  bankers  and  business  men  through 
the  power  which  they  exercise  in  the  world  of  finance. 

The  control  of  credit  is  the  final  word  of  authority  in 
the  present  day  business  world,  and  that  control  is  more 
completely  in  the  hands  of  the  plutocracy  at  the  present 
time  than  it  has  been  at  any  period  since  the  struggle  be- 
tween the  plutocracy  and  the  democracy  began  to  develop 
along  modern  lines. 

Through  its  control  of  the  nation’s  surplus,  the  plu- 
tocracy finds  itself  in  a position  of  immense  superiority. 
Every  branch  of  the  government,  like  every  other  social 
institution,  must  go  to  the  plutocracy  for  the  funds  with 
which  affairs  are  carried  on.  The  wealth  owners  pay  the 
tax  in  the  first  instance;  the  wealth  owners  are  the  phi- 
lanthropists and  the  benefactors ; they  give  to  school,  col- 
lege, church  and  hospital.  They  hold  the  purse  strings 
of  the  nation’s  surplus. 

The  control  over  the  nation’s  surplus  puts  those  who 
may  exercise  the  control  in  a position  of  dizzying  su- 
premacy. They  are  at  the  apex — and  they  propose  to  use 
their  new-won  power  for  their  further  enrichment. 


26 


THE 


NEW  SLAVERY 


7.  Poverty  Slavery. 

THE  wealth-owners,  the  job-owners,  the  masters  of 
the  economic  world  receive  the  first  fruits  of  indus- 
trial life.  The  wealth  producers;  the  job  takers,  the 
slaves  of  the  modern  economic  world  take  the  leavings,  the 
culls,  the  crusts  and  crumbs  of  life.  ' 

The  pay  of  the  wealth  producers  is  so  small ; the  un- 
certainties of  industrial  and  social  life  are  so  great;  the 
margin  between  wages  and  the  cost  of  the  necessaries  of 
life  is  so  narrow  that  the  workers — millions  of  them — live 
in  poverty. 

The  evidence  on  this  point  is  abundant.  The  Reports 
of  the  Immigration  Commission,  the  Reports  of  the  Indus- 
trial Relations  Commission,  the  Bulletins  of  the  Federal 
Children’s  Bureau,  and  the  publications  of  the  United 
States  Bureau  of  Health  all  show  an  appalling  amount  of 
poverty  in  the  United  States.  A recent  Bulletin  issued  by 
the  United  States  Bureau  of  Health  (Bulletin  76)  indi- 
cated that  there  were  in  the  neighborhood  of  30,000,000 
people  in  the  United  States  living  in  poverty.  For  the 
most  part  these  are  the  families  of  the  workers. 

John  Galsworthy,  in  twelve  lines,  has  given  us  a 
master  picture  of  this  poverty. 

“Of  a night  without  stars — wind  withdrawn, 

God’s  face  hidden,  indignity  near  me, 

Drink  and  the  paraffin  flares  to  sear  me — 
Dust-colored  hunger — so  was  I born! 

“Of  a city  noon-day — sand  through  sieve 

Sifting  down,  dust  padding  the  glamor — 

I of  the  desolate,  white  lipped  clamor 
Millioning  fester — so  do  I live! 


THE  NEW  SLAVERY 


27 


“Of  a poor-house  morning — not  asking  why, 

Breath  choked,  dry-eyed — death  of  me  staring; 
Voices  of  strangers  and  no  one  caring — 

God!  who  hath  made  me! — So  shall  I die!” 

From  birth  to  death  it  blights,  warps,  destroys. 

“Rut,”  protests  the  self-righteous  Pharisee,  “ it  is  his 
fault;  he  is  a drunken,  worthless  loafer;  he  gets  what  he 
deserves.  Let  him  be  poor!” 

The  best  answer  to  that  argument  that  has  been  writ- 
ten in  modern  times  is  to  be  found  in  Shaw’s  introduction 
to  “Major  Barbara,”  “Now  what  does  this  Let  Him  Be 
Poor  mean  ? It  means  let  him  be  weak.  Let  him  be  ignor- 
ant. Let  him  become  a nucleus  of  disease.  Let  him  be  a 
standing  exhibition  and  example  of  ugliness  and  dirt.  Let 
him  have  rickety  children.  Let  him  be  cheap  and  let  him 
drag  his  fellows  down  to  his  price  by  selling  himself  to  do 
their  work.  Let  his  habitations  turn  our  cities  into  poison- 
ous congeries  of  slums.  Let  his  daughters  infect  our  young 
men  with  the  diseases  of  the  streets  and  his  sons  revenge 
him  by  turning  the  nation’s  manhood  into  scrofula,  cow- 
ardice, cruelty,  hypocrisy,  political  imbecility,  and  all  the 
other  fruits  of  oppression  and  mal-nutrition.  * * * 

This  being  so,  is  it  really  wise  to  let  him  be  poor?  Would 
he  not  do  ten  times  less  harm  as  a prosperous  burglar,  in- 
cendiary, ravisher  or  murderer,  to  the  utmost  limits  of 
humanity’s  comparatively  negligible  impulses  in  these  di- 
rections? Suppose  we  were  to  abolish  all  penalties  for 
such  activities  and  decide  that  poverty  is  the  one  thing 
we  will  not  tolerate — that  every  adult  with  less  than,  say, 
$1,800  a year,  shall  be  painlessly  but  inexorably  killed,  and 
every  hungry  half  naked  child  forcibly  fattened  and 
clothed,  would  that  not  be  an  enormous  improvement  on 
our  existing  system,  which  has  already  destroyed  so  many 
civilizations  and  is  visibly  destroying  ours  in  the  same 
way?” 


28 


THE  NEW  SLAVERY 


Do  you  wonder  that  Froude  writes,  “The  endurance 
of  the  inequalities  of  life  by  the  poor  is  the  marvel  of 
human  society”? 

The  whole  system  is  so  absurd — so  overbalanced — 
that  one  is  amazed  that  it  can  endure.  The  injustice  to 
the  poor  is  so  monstrous ; the  special  privileges  of  the  rich 
are  so  immense,  that  it  seems  impossible  that  they  should 
continue. 

With  gripping  power,  Edward  Bellamy  describes  the 
situation  in  his  well  known  parable  of  the  Stage  Coach, 
“By  way  of  attempting  to  give  the  reader  some  general 
impression  of  the  way  people  lived  together  in  those  days, 
and  especially  of  the  relations  of  the  rich  and  poor  to  one 
another,  perhaps  I cannot  do  better  than  compare  society 
as  it  was  then  to  a prodigious  coach  which  the  masses  of 
humanity  were  harnessed  to  and  dragged  toilsomely  along 
a very  hilly  and  sandy  road.  The  driver  was  Hunger  and 
permitted  no  lagging,  though  the  pace  was  necessarily 
very  slow.  Despite  the  difficulty  of  drawing  the  coach 
at  all  along  so  hard  a road,  the  top  was  covered  with  pas- 
sengers who  never  got  down,  even  at  the  steepest  ascents. 
The  seats  on  top  were  very  breezy  and  comfortable.  Well 
up  out  of  the  dust  their  occupants  could  enjoy  the  scenery 
at  their  leisure,  or  critically  discuss  the  merits  of  the 
straining  team.  Naturally  such  places  were  in  great  de- 
mand and  the  competition  for  them  was  keen,  every  one 
seeking  as  the  first  end  in  life  to  secure  a seat  on  the 
coach  for  himself  and  to  leave  it  to  his  child  after  him. 
By  the  rule  of  the  coach  a man  could  leave  his  seat  to 
whom  he  wished,  but  on  the  other  hand  there  were  many 
accidents  by  which  it  might  at  any  time  be  wholly  lost. 
For  all  that  they  were  so  easy,  the  seats  were  very  inse- 
cure, and  at  every  sudden  jolt  of  the  coach  persons  were 
slipping  out  of  them  and  falling  to  the  ground,  where  they 
were  instantly  compelled  to  take  hold  of  the  rope  and  help 
to  drag  the  coach  on  which  they  had  before  ridden  so 
pleasantly.  It  was  naturally  regarded  as  a terrible  mis- 


THE  NEW  SLAVERY 


29 


fortune  to  lose  one’s  seat,  and  the  apprehension  that  this 
might  happen  to  them  or  their  friends  was  a constant 
cloud  upon  the  happiness  of  those  who  rode. 

“But  did  they  think  only  of  themselves  you  ask?  Was 
not  their  very  luxury  rendered  intolerable  to  them  by  com- 
parison with  the  lot  of  their  brothers  and  sisters  in  the 
harness,  and  the  knowledge  that  their  own  weight  added 
to  their  toil?  Had  they  no  compassion  for  fellow  beings 
from  whom  fortune  only  distinguished  them?  Oh,  yes; 
commiseration  was  frequently  expressed  by  those  who 
rode  for  those  who  had  to  pull  the  coach,  especially  when 
the  vehicle  came  to  a bad  place  in  the  road,  as  it  was  con- 
stantly doing,  or  to  a particularly  steep  hill.  At  such 
times,  the  desperate  straining  of  the  team,  their  agonized 
leaping  and  plunging  under  the  pitiless  lashing  of  Hunger, 
the  many  who  fainted  at  the  rope  and  were  trampled  in 
the  mire,  made  a very  distressing  spectacle,  which  often 
called  forth  highly  creditable  displays  of  feeling  on  the 
top  of  the  coach.  At  such  times  the  passengers  would 
call  down  encouragingly  to  the  toilers  of  the  rope,  exhort- 
ing them  to  patience,  and  holding  out  hopes  of  possible 
compensation  in  another  world  for  the  hardness  of  their 
lot,  while  others  contributed  to  buy  salves  and  liniments 
for  the  crippled  and  injured.  It  was  agreed  that  it  was  a 
great  pity  that  the  coach  should  be  so  hard  to  pull,  and 
there  was  a sense  of  general  relief  when  the  specially  bad 
piece  of  road  was  gotten  over.  This  relief  was  not,  indeed, 
wholly  on  account  of  the  team,  for  there  was  always  some 
danger  at  these  bad  places  of  a general  overturn  in  which 
all  would  lose  their  seats. 

“It  must  in  truth  be  admitted  that  the  main  effect  of 
the  spectacle  of  the  misery  of  the  toilers  at  the  rope  was 
to  enhance  the  passenger’s  sense  of  the  value  of  their  seats 
upon  the  coach,  and  to  cause  them  to  hold  on  to  them  more 
desperately  than  before.  If  the  passengers  could  only  have 
felt  assured  that  neither  they  nor  their  friends  would  ever 
fall  from  the  top,  it  is  probable  that,  beyond  contributing 


30 


THE  NEW  SLAVERY 


to  the  funds  for  liniments  and  bandages,  they  would  have 
troubled  themselves  extremely  little  about  those  who 
dragged  the  coach.”* 

How  far  is  Bellamy  from  the  truth?  Has  he  over- 
stated it  or  understated  it?  How  accurate  is  this  picture? 
Does  it  do  full  justice  to  the  child  labor  of  Georgia,  to  the 
slums  of  New  York,  to  the  “south  side”  of  Chicago,  to 
Lawrence,  Little  Falls  and  Paterson,  to  Ludlow  and  Bis- 
bee?  Does  it  give  a complete  picture  of  the  two  hundred 
Americans  with  incomes  of  more  than  a million  a year  and 
the  thirty  millions  of  their  fellow  creatures  living  here  in 
poverty? 

Wealth  mastery  and  poverty  slavery  are  facts  in  the 
United  States.  The  fact  is  inescapable,  but  :io  pen  can  do 
them  full  justice. 


* “Looking*  Backward,”  Edward  Bellamy. 


THE  NEW  SLAVERY 


31 


8 . Finance  on  the  Throne. 

THE  wealth  owner,  sooner  or  later,  becomes  the  ag- 
gressor. For  a time  he  may  hide  in  terror  lest  some 
one  learn  of  his  wealth  and  attempt  to  take  it  from 
him.  Then  comes  the  reaction,  when  the  owner  of  a dollar 
decides  to  make  two  of  it.  The  American  plutocracy  has 
reached  that  point  and  has  made  that  decision.  They  have 
placed  themselves  in  a position  where  they  can  exploit  the 
worker  who  takes  a job  from  them;  exploit  the  consumer 
who  buys  the  products;  exploit  the  community  by  taking 
the  social  values  which  the  community  creates,  and  exploit 
foreign  countries  in  all  of  these  directions. 

The  United  States  until  recent  years  was  a borrowing 
nation.  The  early  colonists  brought  with  them  little  capi- 
tal. Later  immigrants  came  with  their  strong  bodies,  their 
willing  hearts,  but  with  little  or  no  wealth.  Meanwhile  the 
country  was  expanding;  resources  were  developed;  mines 
and  factories  sprang  up ; transportation  lines  were  estab- 
lished— all  of  which  activities  required  capital  and  all  of 
which  promised  handsome  returns  to  the  investors.  Amer- 
ican citizens  furnished  most  of  the  capital  required  in  the 
transformation  of  American  economic  life  to  its  present 
status  of  large  scale  industry,  but  the  capitalists  of  all 
of  the  leading  European  nations — particularly  of  Eng- 
land, France  and  Belgium — invested  heavily  in  American 
property. 

A generation  ago  the  tide  began  to  turn.  The  drastic 
economic  changes  that  preceded  and  followed  the  hard 
times  of  the  ’nineties  placed  large  surplus  funds  at  the 
disposal  of  American  capital  during  the  period  of  trust 
organization  that  extended  from  1898  to  1901,  conclusively 
proving  America’s  ability  to  finance  her  own  enterprises 


32 


THE  NEW  SLAVERY 


and  since  that  time  America  has  been  independent  of  Euro- 
pean money. 

Still  the  European  investments  in  American  proper- 
ties were  heavy.  In  1913-14  they  probably  amounted  to 
nearly  eight  billions  of  dollars  (out  of  a total  valuation 
of  property  of  200  billions). 

The  great  war  in  Europe  finished  the  work  that  the 
economic  changes  of  the  ‘nineties  had  begun.  The  eco- 
nomic stress  which  the  war  placed  upon  Europe  made  the 
United  States  the  lender  and  Europe  the  borrower.  The 
export  trade  of  the  United  States,  which  had  hovered 
under  the  two  billion  mark  for  years,  jumped  to  over  three 
billions  in  1915  and  to  four  and  a half  billions  in  1916.  Eu- 
rope paid  for  these  huge  purchases  by  selling  American 
securities  back  to  America,  and  by  marketing  government 
bonds  in  the  United  States. 

The  great  war  found  the  United  States  firmly  estab- 
lished as  a lending  nation.  The  business  prosperity  inci- 
dent to  the  war  gave  her  an  immense  impetus  toward  a 
position  of  commanding  superiority  in  the  economic  world. 

The  great  economic  surpluses  accumulated  in  the 
United  States  since  1900  have  in  the  meantime  been  seeking 
an  outlet  in  the  lands  lying  to  the  south.  Mexico,  Central 
America,  the  West  Indies  and  South  America  possess  im- 
mense natural  resources  which  are  for  the  most  part  un- 
developed. The  people  are  not  yet  awake  to  the  danger 
of  invasion  of  foreign  capital.  Labor  is  cheap;  govern- 
ments are  complacent  or  timid  and  these  lands  offer  un- 
excelled opportunities  for  commercial  and  industrial  ex- 
ploitation. 

The  American  capitalists  have  not  been  slow  to  take 
advantage  of  these  opportunities.  More  than  a billion  has 
been  invested  in  Mexico  and  probably  more  than  two  bil- 
lions in  Central  and  South  America.  At  the  present  time 
every  effort  is  being  made  to  add  to  these  investments. 


THE  NEW  SLAVERY 


33 


Washington’s  “mind  your  own  business”  policy  was 
generally  accepted  in  America  as  late  as  1890.  The  eco- 
nomic expansion  into  the  countries  lying  to  the  south  of 
the  United  States  has  led  to  a wholly  new  spirit  in  the 
business  world.  Today  American  business  interests  are 
insisting  upon  the  right  to  military  and  naval  protection 
for  all  American  investments.  They  are  going  further 
and  asking  for  an  economic  application  of  the  Monroe 
Doctrine. 

Could  the  surplus  wealth  that  is  flowing  into  Central 
and  South  America  be  disposed  of  in  the  United  States? 
Are  there  any  persons  here  lacking  the  comforts — even 
the  necessaries  of  life?  Yes,  there  are  millions  living  in 
abject  poverty.  The  American  people  could  utilize  to  ad- 
vantage every  dollar  of  this  surplus  in  feeding,  clothing 
housing,  educating,  road  building  and  like  activities.  But 
so  long  as  the  surplus  remains  in  the  hands  of  the  plu- 
tocracy it  will  go  not  where  it  will  do  the  most  good,  but 
where  it  will  earn  the  largest  profits. 

The  vast  sums  of  capital  that  are  flowing  toward  the 
South  American  countries  are  intended  to  benefit  the 
American  plutocracy.  Any  benefit  that  may  be  derived 
by  the  people  of  South  America  is  incidental  to  the  main 
object — profit  for  the  American  capitalist. 

Foreign  investments  provide  benefit,  in  the  main,  for 
neither  the  people  of  South  America  nor  the  people  of  the 
United  States.  Their  advantages  go  to  the  plutocracy. 


34  THE  NEW  SLAVERY 


9,  Liberty  on  the  Scaffold . 

DURING  those  dark  days  in  the  history  of  the  Ameri- 
can democracy,  when  the  Kings  of  Finance  were 
coming  into  their  own — gaining  full  control  of  the 
economic  machinery  of  the  nation,  the  liberties  of  the 
American  people  were  being  taken  from  them  blatantly — 
without  so  much  as  a “by  your  leave.” 

First  freedom  of  speech  and  freedom  of  assemblage 
were  denied.  Street  meetings  were  suppressed;  public 
halls  were  refused  to  bona  fide  organizations.  Anyone 
who  urged  the  preservation  of  industrial  justice  in  the 
United  States  or  who  spoke  in  favor  of  peace  was  an 
“infamous  traitor.”  “Patriotic”  fervor  showed  itself  in 
an  almost  ceaseless  clamor.  The  leading  business  men 
were  the  chief  “patriots”  and  anyone  who  had  a word  of 
opposition  to  utter  against  them  or  their  interests  was 
branded  as  a public  enemy  and  treated  accordingly. 

The  newspapers  had  long  ago  ceased  to  tell  the  truth. 
Now  they  became  avowed  pleaders  for  the  vested  inter- 
ests.* 

Ministers,  educators,  social  workers  and  other  profes- 
sional people  did  not  hesitate  long.  There  was  only  one 
“sensible”  thing  to  do — they  went  over  in  a body  to  the 
plutocracy.  Those  who  stood  out  were  disciplined  in  the 
most  summary  fashion. 

The  outcome  was  inevitable.  It  had  been  predicted 
time  and  time  again — nowhere  more  suggestively  than  by 
Edgar  Lee  Masters,!  who  makes  Daisy  Fraser,  woman  of 
the  town,  review  the  professional  men  in  these  words : 

Did  you  ever  hear  of  Editor  Whedon 

Giving  to  the  public  treasury  any  of  the  money  he  received 


♦Quotation  from  Cobb. 
fSpoon  River  Anthology. 


THE  NEW  SLAVERY 


35 


For  supporting  candidates  for  office? 

Or  for  writing  up  the  canning  factory 
To  get  people  to  invest? 

Or  for  suppressing  the  facts  about  the  bank, 

When  it  was  rotten  and  ready  to  break? 

Bid  you  ever  hear  of  the  Circuit  Judge 
Helping  anyone  except  the  “Q”  railroad, 

Or  the  bankers?  Or  did  Rev.  Peet  or  Rev.  Sibley 
Give  any  part  of  their  salary,  earned  by  keeping  still 
Or  speaking  out  as  the  leaders  wished  them  to  do, 

To  the  building  of  the  water-works?” 

Then  the  soldiers  and  sailors  began  taking  the  law 
into  their  own  hands, — breaking  up  meetings  in  Baltimore, 
New  York,  Boston  and  other  cities,  shooting  citizens  quite 
indiscriminately ; insulting  women ; bullying,  domineering, 
spreading  a reign  of  terror  among  all  of  those  elements  in 
the  population  who  did  not  agree  with  the  views  of  the 
administration.  These  uniformed  men  were  followed  by 
secret  police  who  infested  the  country — laying  traps, 
bringing  accusations,  making  false  arrests  and  giving  to 
the  American  people  an  excellent  illustration  of  Czarism 
in  one  of  its  most  offensive  forms. 

Finally  came  the  suppression  of  those  papers  which 
differed  radically  with  the  administration  upon  war,  con- 
scription, the  labor  problem,  or  any  other  vital  public  is- 
sue. First  the  papers  were  declared  unmailable  under  the 
espionage  law.  Then,  because  they  had  not  appeared  “reg- 
ularly” they  were  denied  second  class  mailing  privileges, 
which  practically  meant  that  the  papers  in  question  had 
been  excluded  from  the  mails  because  they  differed  from 
the  administration.  Finally  certain  editors  were  indicted 
because  they  had  circulated  non-mailable  matter. 

The  wreck  of  popular  rights  was  complete.  Free 
speech,  freedom  of  assemblage,  free  press,  “the  tested 
foundation  of  political  liberty”*  had  been  swept  aside. 
Then,  to  add  insult  to  in j ury,  women,  carrying  banners  on 


36 


THE  NEW  SLAVERY 


the  streets  of  Washington  as  a part  of  a demand  for  the 
vote,  were  jailed  for  “disorderly  conduct”;  American  citi- 
zens who  wished  to  attend  a peace  conference  called  at 
Stockholm  by  the  Russian  Council  of  Workers’  and  Sol- 
diers’ Delegates,  were  denied  their  passports  under  a law 
passed  in  1799;  Tom  Mooney,  his  wife  and  several  other 
labor  men  were  “framed  up”  in  San  Francisco;  over  a 
thousand  strikers  and  strike  sympathizers  were  deported 
in  open  defiance  of  law  and  constitution  by  the  mine  own- 
ers of  Bisbee,  Ariz.,  and  Frank  Little  was  hanged  in  Butte 
for  the  sole  crime  of  being  a labor  organizer. 

The  situation  recalls  the  ironical  question  put  by  Li 
Hung  Chang  at  the  end  of  a description  of  a visit  to  In- 
dependence Hall  in  Philadelphia, — “They  showed  me  a 
beautifully  shaped  old  bell,  which  is  in  Independence  Hall, 
and  is  called  the  Bell  of  Liberty;  which  means  that  at 
its  ringing  all  men  within  sound  of  its  voice  know  they 
are  free.  But  they  do  not  ring  it  any  more  because  it  is 
cracked.  Is  Liberty  cracked  also?” 

The  plutocracy  had  gained  its  point.  Liberty  was  on 
the  scaffold. 


^President  Wilson,  April  2,  1917. 


THE  NEW  SLAVERY 


37 


10.  The  Sops. 

THE  plutocratic  oligarchy  was  in  control.  The  great 
mass  of  men  lived  and  suffered  under  the  system  of 
job  slavery  that  had  the  United  States  in  its  grip. 
Wealth  was  master,  its  heel  set  roughly  upon  the  neck  of 
poverty.  Meanwhile  the  plutocrats  threw  sops  to  the 
people — little  crumbs  of  comfort  in  a sea  of  economic  and 
social  iniquity. 

The  plutocracy  offered  to  people  who  were  asking  for 
bread,  stones  which  the  people  themselves  had  crushed 
in  the  hard  mill  of  experience.  The  plutocracy  kept  the 
bread,  meanwhile,  for  its  own. 

The  sop  most  frequently  offered  to  the  people  dur- 
ing the  past  few  years  is  called  “efficiency,”  or  “scientific 
management.”  The  job-owners,  who  control  the  means  of 
livelihood,  say  to  the  people,  the  wage  slaves,  millions  of 
whom  dwell  in  poverty, — “Produce  more  and  you  will  get 
more.”  Efficiency  means  getting  a larger  return  with  a 
less  expenditure  of  time,  effort  and  money.  The  really 
important  question  is, — “Who  gets  more?” 

Scientific  management  in  industry  means  that  the 
employer  will  make  an  individual  wage  contract  with 
every  man  in  his  shop.  Trade  Unionism  has  been  built 
upon  the  collective  bargain.  Instead  of  each  man  making 
an  individual  contract  with  the  employer,  all  of  the  men, 
through  their  representatives,  have  made  the  contract. 
This  method  has  provided  the  men  with  a monopoly  power 
which  is  the  only  thing  that  stands,  in  ordinary  years, 
between  them  and  subsistance  wages. 

The  proposition  of  the  Scientific  Manager  is  alluring. 
“Sign  up  under  this  plan,”  he  says.  “You  will  be  able  to 
make  five  cents  more  an  hour  through  the  bonus  that  we 
provide,  you  will  not  need  to  keep  up  your  payments  of 


38 


THE  NEW  SLAVERY 


union  dues  and  through  our  bonus  system,  you  can  earn 
as  much  as  you  care  to.” 

All  over  the  United  States  men  have  lent  an  ear  to 
this  argument,  have  abandoned  their  unions,  increased 
their  output,  received  bonuses  and  added  to  their  total 
wages.  At  the  same  time  they  have  thrown  themselves 
on  the  mercy  of  their  employers.  When  hard  times  come, 
piece  rates  and  bonus  rates  can  be  cut,  and  the  men  have 
no  redress. 

The  efficiency  movement  has  invaded  the  schools  very 
generally.  In  all  grades  of  school  work  and  in  all  types 
of  school  courses,  mad  efforts  are  being  made  to  increase 
efficiency.  Courses  are  being  organized  in  salesmanship, 
commercial  and  industrial  subjects,  professional  lines — 
indeed,  any  avenue  that  suggests  the  possibility  of  greater 
efficiency  is  followed  up  with  avidity. 

The  business  world  is  pushing  the  efficiency  cult. 
The  plutocracy  is  interested  in  scientific  management  in 
the  factory  and  efficiency  in  education.  Efficiency  means 
greater  productivity. 

Has  not  the  time  come  to  stop  emphasizing  steel  rails 
and  calico?  Is  not  the  day  dawning  for  the  production 
of  men  and  women?  We  can  dispense  with  increases  in 
material  production,  but  men  and  womep  are  indispens- 
able to  civilization. 

Another  sop,  which  tens  of  millions  thought  was  the 
real  thing,  is  governmental  regulation.  During  the  past 
fifty  years  there  have  been  three  successive  phases  of  this 
regulation  that  are  of  peculiar  interest  at  this  point.  First 
came  railroad  regulation,  second  came  trust  regulation 
and  finally  the  regulation  of  public  utilities.  The  same 
sequence  appears  in  each  case, — public  indignation,  pro- 
test and  clamor;  emasculated  regulative  measures;  real 
regulation  in  charge  of  the  parties  to  be  regulated. 

The  government  regulation  in  the  United  States  may 
be  compared  with  the  case  of  a garden  in  which  a number 


THE  NEW  SLAVERY 


39 


of  strawberry  plants  are  growing.  It  is  possible  to  dig 
out  the  strawberry  plants  and  throw  them  on  the  sod  heap. 
No  one  wishes  to  do  that,  however,  because  then  the  supply 
of  berries  will  cease.  It  is  possible  to  cut  the  runners, 
pinch  the  blossoms,  nip  off  poor  runty  fruit,  dig  out  the 
weeds,  and  stir  up  the  ground  about  the  roots  enough  so 
that  the  plants  will  be  fine  and  strong — producing  good 
sound  fruit. 

Regulation  has  had  the  same  effect  on  quasi-  public 
business  that  selection  and  cultivation  had  on  strawber- 
ries. The  regulators  have  cut  off  unwise  projects;  in- 
sisted upon  care  and  judgment  in  new  ventures,  stirred 
up  and  pruned  the  organization  and  stimulated  growth 
through  this  process  of  regulative  cultivation.  Regula- 
tion was  intended  to  benefit  the  public.  In  reality,  it 
has  given  its  chief  advantages  to  the  corporations  that 
have  been  regulated.  The  regulators  have  been  busy,  as 
the  gardener  is  busy.  They  have  fostered  rather  than 
hindered.  The  great  utilities  could  not  have  gained  more 
from  the  expenditures  for  regulation  if  they  had  paid  the 
bills  themselves  instead  of  merely  controlling  the  per- 
sonnel and  directing  the  operations  of  the  commissions 
that  have  been  maintained  from  the  public  treasury. 

“Social  reform”  has  stopped  many  a gap  in  the  plu- 
tocratic ramparts  and  silenced  many  a protesting  soul 
with  the  belief  that  the  millenium  had  dawned  at  last. 
Child  labor  legislation,  regulations  to  safeguard  health, 
“welfare  work”  in  its  many  forms, — the  whole  great  round 
of  “social  legislation”  has  been  opposed  by  one  wing  of 
the  plutocracy  while  it  was  fostered  by  another.  Its  whole 
import  has  been  to  make  the  atrocities  of  capitalism  less 
atrocious  and  more  endurable — to  keep  the  system  of  ex- 
ploitation and  wage  slavery  intact  while  it  stopped  some 
of  the  worst  of  its  abuses.  The  victims,  while  less  fear- 
fully abused,  were  still  victims. 

Again  there  is  philanthropy — the  most  generally 
patronized  of  all  forms  of  social  fire  insurance — philan- 


40 


THE  NEW  SLAVERY 


thropy,  “taking  off  the  insurrectionary  edge  of  poverty 
with  bread  and  treacle.”  Money,  which  is  derived  for  the 
most  part  through  exploitation  and  social  injustice  and 
special  privilege,  returned,  in  homeopathic  doses,  to  stop 
the  gaping  wounds  that  the  original  wrong  inflicted  upon 
society.  “It  is  good,”  said  St.  Augustine,  “that  thou  givest 
bread  to  the  hungry,  but  better  were  it  that  none  hun- 
gered and  that  thou  hadst  none  to  give.” 

The  philanthropy,  which  today  is  rampant  over  the 
whole  of  western  civilization,  is  a symptom  of  the  social 
disease  that  has  infected  society  to  its  utmost  being. 
Philanthropy  in  a democracy!  The  very  idea  is  prepos- 
terous— if  the  people  want  schools,  libraries  or  hospitals, 
they  can  afford  to  build  them.  They  need  not  depend 
upon  philanthropy.  The  man  who  offers  to  endow  a dem- 
ocratic institution  in  a democratic  community  insults  the 
community  when  he  makes  this  offer.  Philanthropy  is 
an  attribute  of  plutocracy — democracy  knows  it  not. 

Still  they  have  filled  the  land  so  full  of  their  clamor 
about  “success,”  “rising  to  the  top  of  the  heap,”  “getting 
there,”  and  “making  things  go”  that  Solomon  himself 
might  well  be  confused  through  the  din.  Ambition  they 
have  glorified;  of  material  prosperity  they  have  made  a 
god  that  all  of  the  people  are  taught  to  worship.  So  long 
as  the  world  is  dominated  by  the  principle  of  material 
success,  and  while  the  plutocrats  control  the  surplus 
wealth  of  the  community,  they  can  have  their  own  way, 
buying  it  as  they  go. 

The  jungle  spirit  which  is  bred  out  of  the  jungle 
struggle  of  the  western  world  knows  no  social  principle. 
Its  rule  of  life  is  the  rule  of  tooth  and  claw — “An  eye  for 
an  eye  and  a tooth  for  a tooth.”  In  that  spirit  has  it  built 
up  the  system  of  economic  slavery  and  social  vassalage 
that  is  now  riding  western  civilization  to  its  destruction ; 
in  the  same  spirit  of  patronizing  superiority  do  they  prac- 
tice social  reform  and  bestow  alms,  while  they  reap  the 
advantages  of  efficiency  and  government  regulation. 


THE  NEW  SLAVERY 


41 


Is  there  such  a thing  as  wage  slavery?  Do  you  an- 
swer,— “Yes”?  Then,  assuredly  with  the  cult  of  efficiency 
accepted  and  practiced;  with  government  regulation  and 
social  reform  the  rule  of  the  road;  with  abounding  phi- 
lanthropy and  endless  almsgiving,  wage  slavery  is  still 
wage  slavery — mitigated,  perchance,  but  still  slavery. 

The  southern  slave  owner,  before  the  Civil  war,  was, 
for  the  most  part  kind  to  his  slaves.  It  is  probable  that 
only  a small  percentage  of  the  black  people  suffered  act- 
ual hardship.  Still,  as  slaves,  these  men  and  women  were 
sold  like  so  many  cattle  or  copper  ingots.  Treated  at  the 
best,  they  were  still  slaves. 

The  plutocrat  today  is  kind  and  considerate  of  his 
wage  earners.  He  advocates  reforms,  and  gives  to  charity. 
Notwithstanding  all  of  his  reforms — despite  all  of  his 
charity,  the  wage  earners  are  still  slaves. 


42 


THE  NEW  SLAVERY 


11.  When  Is  a Slave  Not  a Slave? 

WHEN  is  a slave  not  a slave? 

When  he  is  his  own  master. 

When  is  a man  his  own  master? 

When  he  has  a voice,  with  other  men,  in  deciding  upon 
the  conditions  under  which  he  shall  live. 

So  long  as  one  man  is  permitted  to  rule  other  men 
without  their  consent,  so  long  will  he  be  master;  so  long 
will  they  be  slaves.  The  conditions  surrounding  their 
lives  may  be  ideal;  they  may  enjoy  every  necessary,  every 
comfort,  every  luxury  at  the  hands  of  their  bountiful 
masters,  but  so  long  as  these  necessaries,  comforts  and 
luxuries  are  a donation  and  not  a right,  so  long  the  master 
will  be  master  and  the  slave  will  be  slave ; so  long  will  the 
doors  of  the  cage  (even  though  it  be  a gilded  one)  shut 
tight  upon  the  prophets  of  liberty,  justice  and  equality. 

When  is  a slave  not  a slave?  When  he  has  acquired 
sufficient  intelligence  and  mustered  up  enough  courage 
to  strike  the  shackles  from  his  own  body,  mind  and  spirit. 

“Heredity  bondsmen!  Know  ye  not 
Who  would  be  free  themselves  must  strike  the  blow ? 

By  their  right  arms  the  Conquest  must  be  wrought t” 

Thus  Byron  speaks,  immortally,  to  the  oppressed  of 
the  earth. 

Further,  stronger,  grander,  the  point  that  Lowell 
makes — he  lives  in  bondage  who  fears  to  strike  the  chains 
from  his  brothers’  hands. 

“Men!  whose  boast  it  is  that  ye 
Come  of  fathers  brave  and  free 
If  there  breathe  on  earth  a slave, 

Are  ye  truly  free  and  brave  ? 


THE  NEW  SLAVERY 


43 


No!  True  Freedom  is  to  share 
All  the  chains  our  brothers’  wear, 

And  with  heart  and  hand  to  be 
Earnest  to  make  others  free! 

“They  are  slaves  who  fear  to  speak 
For  the  fallen  and  the  weak ; 

They  are  slaves  who  will  not  choose 
Hatred,  scoffing  and  abuse, 

Bather  than  in  silence  shrink 

From  the  truth  they  needs  must  think; 

They  are  slaves  who  dare  not  be 
In  the  right  with  two  or  three.” 

When  all  the  world  is  free — when  liberty  is  for  all 
and  on  equal  terms  then  the  slave  is  no  longer  a slave, 
for, — 

" While  there  is  a lower  class,  / am  in  it, 

While  there  is  a criminal  class,  / am  of  it, 

While  there  is  a soul  in  prison,  I am  not  free 

Human  slavery  will  not  be  abolished  until  all  enjoy 
equal  opportunity  for  life,  liberty  and  the  pursuit  of  hap- 
piness; until  all  government  derives  its  just  power  from 
the  consent  of  the  governed.  Economic  slavery  will  curse 
the  earth  while  there  is  a master  class  that  is  able  to  say 
to  a servant  class, — “You  work  and  toil  and  earn  bread 
and  I’ll  eat  it.”  So  long  as  there  is  a vestige  of  special 
privilege;  so  long  as  the  sons  and  daughters  of  one  part 
of  the  people  enjoy  rights  and  privileges  denied  to  the 
sons  and  daughters  of  another  part  of  the  community, 
there  will  be  slavery.  The  system  of  economic  life  that 
now  dominates  the  western  world  is  in  its  very  essence 
a slave  system,  and  while  this  system  endures  there  will 
be  economic  slavery. 


Eugene  V.  Debs. 


44 


THE  NEW  SLAVERY 


14.  The  Old  Freedom. 

THE  old  freedom — the  freedom  of  the  seers  and  the 
prophets;  the  freedom  for  which  men  have  suffered 
and  struggled  and  died  down  across  the  ages,  is, — 
1.  The  freedom  of  the  body  of  a man  to  the  end 
that  he  may  make  a living  by  his  own  efforts,  at  his  own 
calling  for  himself  and  his  family,  without  saying  to  any 
man  “By  your  leave.” 

2.  The  freedom  of  mind  and  spirit  which  enables  him 
to  look  the  world  in  the  face  and  to  speak  the  real  con- 
victions of  his  soul  unhampered  and  uncriticised.*  To  cry 
aloud  against  injustice,  until  it  has  given  place  to  jus- 
tice; to  denounce  falsehood  until  it  has  been  supplanted 
by  truth ; to  stand  for  the  right,  as  he  sees  it,  unflinching 
and  unafraid,  from  the  rising  to  the  setting  of  the  sun,  and 
all  through  the  watches  of  the  dark  night. 

“Sink  or  swim;  live  or  die;  survive  or  perish,  I am 
for  the  Declaration,”  cried  John  Adams,  in  his  passionate 
plea  for  the  adoption  of  the  Declaration  of  Independence. 

“Give  me  liverty  or  give  me  death,”  and  “If  this  be 
treason,  make  the  most  of  it,”  were  the  words  in  which 
Patrick  Henry  asserted  his  manhood. 

William  Lloyd  Garrison  was  dragged  through  the 
streets  of  Boston  by  a broadcloth  mob.  His  words  in  the 
old  “Liberator”  spoke  the  unmistakable  language  of  lib- 
erty: “I  am  aware  that  many  object  to  the  severity  of  my 
language;  but  is  there  not  cause  for  severity?  I will  be  as 
harsh  as  Truth,  and  as  uncompromising  as  Justice.  * * * 


*“If  there  is  one  thing  that  we  love  more  than  another  in  the 
United  States  it  is  that  every  man  should  have  the  privilege,  unmo- 
lested and  uncriticised,  to  utter  the  real  convictions  of  his  mind,"  said 
President  Wilson  at  Soldiers’  Memorial  Hall,  Pittsburgh,  January 
29,  1916. 


THE  NEW  SLAVERY 


45 


I am  in  earnest — I will  not  equivocate — I will  not  exten- 
uate— I will  not  retreat  a single  inch — and  I will  be  heard.” 

These  are  the  accents  of  the  old  freedom — the  free- 
dom that  lives  in  strong  hearts  and  noble  souls ; the  free- 
dom over  which  no  restraining  influence  can  be  exercised. 
Jails  may  open  their  doors;  dungeons  may  gape;  scaf- 
folds may  be  erected — but  the  soul  of  the  old  freedom 
sweeps  down  across  the  centuries,  irresistible,  conquering 
and  to  conquer. 

Let  the  spirit  of  that  old  freedom  but  assert  itself, 
and  the  whole  superstructure  of  the  new  slavery  which 
the  plutocratic  oligarchy  has  erected  for  its  profit  goes 
crashing  into  chaos  and  oblivion.  Let  that  spirit  once 
grip  the  hearts  and  souls  of  men, — special  privilege  gives 
way  to  equal  opportunity ; fear  to  faith ; hate  to  love ; com- 
petition is  swept  aside  by  co-operation  and  brotherhood 
dominates  the  earth. 


THE  ONLY  WAY 

ORGANIZATION 

iisiiiiiiiiiiiiBiiiiiimiiBmiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii 


THE  ONLY  WAY  we’ll  ever  get  Socialism  is  by  working 
for  it  UNITEDLY.  It’s  folly  to  be  a little  Socialist  Party 
all  by  yourself,  making  a little  jab  at  the  enemy  here,  giving 
a little  slap  there,  registering  a diminutive  kick  elsewhere. 

If  we  are  ever  to  overcome  capitalism;  if  we  are  ever  to 
win  the  world  for  the  workers,  we  must  grow  strong  by 
UNITED  action — the  disciplined  and  well  organized  action  of 
thousands  upon  thousands  of  workers,  all  thinking,  planning, 
working  toward  one  and  the  same  end. 

As  an  individual  you  can  continue  to  snap  at  the  heels  of 
capital  until  doomsday.  And  what  will  it  profit  you?  You’ll 
get  kicked  occasionally,  that’s  all. 

But  as  a unit  in  the  world-wide  ORGANIZED  attempt  to 
end  capitalism  and  bid  it  a glad  farewell,  you  and  the  rest  of 
us  TOGETHER  can  hit  telling  blows. 

The  only  way  is — ORGANIZATION.  Join  the  Socialist 
Party.  Pay  dues  and  attend  meetings  regularly.  Face  For- 
ward. Fall  in  line!  Keep  in  step  with  the  millions  of  Social- 
ists who  have  consecrated  their  lives  to  make  living  WORTH 
WHILE. 

And,  by  the  way,  we  are  talking  to  YOU. 

WE  WANT  AN  ANSWER!  WRITE  US  TODAY.  , 

NATIONAL  OFFICE,  SOCIALIST  PARTY 
220  South  Ashland  Boulevard,  Chicago,  HI. 


»()•«»<  >♦<; 


A BOOK  YOU  MUST  READ 

A Nation  Divided 

or 

Plutocracy  vs.  Democracy 

By  SCOTT  NEARING 

Teacher,  Orator,  Writer. 

Author  of  “Poverty  and  Riches,”  “Income,”  “Wages 
in  the  United  States,”  “Anthracite,”  “The  Great  Mad- 
ness,” “Reducing  the  Cost  of  Living,”  etc. 

This  brilliant  pamphlet  is  one  of  the  best  things 
Nearing  has  ever  done.  It  is  a crushing  indictment 
of  plutocratic  rule  in  America. 

Published  by 

THE  SOCIALIST  PARTY 
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Chicago,  III. 

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I 

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M 


BOOKS  BY  SCOTT  NEARING 


Wages  nr  the  United  States. 


Reducing  the  Cost  of  Living. 
Anthracite. 

Poverty  and  Riches. 


Social  Adjustment. 

Social  Religion. 

Women  and  Social  Progress. 

(Collaboration  With  Nellie  Nearing) 

The  Super  Race. 


Elements  of  Economics. 

The  New  Education. 

Economics. 

Community  Civics. 

(Collaboration  with  Jessie  Field) 

Solution  of  the  Child  Labor  Problem. 

Social  Sanity. 

The  American  Empire. 

The  Next  Step.  * ~ 


Financino  the  Wage  Earner's  Family. 


OIL  and  the 

GERMS  of 
WAR 


By 

SCOTT  NEARING 


Author  of  “The  Next  Step” , “The 
A merican  Empi  re”,  “ Income  ’ \ etc . 


"International  politics  to-day  are  oil  politics".  — Briand 


NELLIE  SEEDS  NEARING,  Publisher 
Ridgewood,  New  Jersey 


CONTENTS 

I.  Oil. 

Page  No. 

1.  An  Economic  Prodigy 8 

2.  Oil  Empires If 

8.  The  Oil  Revolution 6 

If.  Oil  in  the  Great  War 8 

5.  Oil  Sweeps  into  Politics 9 

6.  Save  the  Empire! 11 

7.  The  Oil  Stampede 12 

8.  A World  Oil  Trust 18 

9.  The  First  Oil  War 16 

10.  The  Logic  of  Oil  Diplomacy 19 

II.  The  Germs  of  War. 

11.  What  Is  War? 19 

12.  War  Is  Organized  Destruction 22 

18.  Hunting  the  Germ 28 

Ilf.  Economic  Causes  of  War 2 If 

15.  Financial  Imperialism  25 

16.  A Typical  Struggle 28 

III.  Killing  the  Germs. 

17.  Making  the  World  a Living  Place 29 

18.  Oil  for  Those  Who  Need  It 29 


Copyright,  1923 


All  Rights  Reserved 
Printed  in  the  United  States  of  America 


1.  An  Economic  Prodigy. 

Oil  is  one  of  the  most  vitally  important  of  all  the  resources, 
yet  it  is  scattered  capriciously  over  the  various  continents.  Its 
products  find  a ready  sale  in  every  corner  of  the  globe,  and  its 
refining,  transport  and  retailing  have  proved  one  of  the  most 
lucrative  of  modern  businesses.  Oil  profits,  heaped  up  in  a 
comparatively  few  hands,  have  added  immensely  to  the  invest- 
able  surpluses  that  drive  the  masters  of  modern  business  toward 
financial  imperialism.  Furthermore,  and  this  is  the  essential 
point,  oil  has  lately  become  the  very  latch-key  to  imperial 
power,  so  that  its  possessor  literally  has  the  riches  of  the  world 
at  his  feet.  The  struggle  for  oil-bearing  lands  has  therefore 
reached  a stage  so  acute  that  it  has  actively  involved  every 
nation  seeking  to  qualify  in  the  race  for  world  supremacy. 

The  oil  industry  is  the  infant  prodigy  of  the  industrial  world. 
Barring  the  automobile  industry,  with  which  it  is  intimately 
connected,  none  has  developed  in  a more  spectacular  manner. 

There  was  no  oil  industry  prior  to  1860,  when  the  world’s 
total  production  was  about  half  a million  barrels.  (Detailed 
figures  page  31.)  Production  for  1870  reached  nearly  six  mil- 
lion barrels;  for  1880,  30  million  barrels;  for  1890,  76  million 
barrels.  As  lately  as  1900,  world  production  was  only  150  mil- 
lion barrels.  By  1910,  however,  production  had  climbed  to  327 
millions,  and  in  1922  it  passed  the  850  million  barrel  mark. 
Oil  has  been  one  of  the  major  industries  only  during  the  past 
25  years. 

Between  1860  and  1900  petroleum  was  used  mainly  for 
illumination  and  for  lubrication.  In  the  cities  it  was  forced  to 
compete  first  with  gas  and  later  with  electricity,  but  in  the 
villages,  and  across  the  sparsely  settled  farming  regions  where 
dwell  most  of  the  inhabitants  of  the  earth,  kerosene  provided, 
for  the  first  time,  a cheap  and  reliable  form  of  canned  sunlight. 
The  farmer  was  no  longer  compelled  to  retire  at  nightfall.  The 
villager  sat  long  after  dark  in  his  lamp-lighted  kitchen,  reading 
or  talking  over  the  business  of  the  day. 

Inexpensive  and  easily  handled,  kerosene  became  a popular 
fuel  in  less  than  a generation.  The  marvelous  rapidity  of  its 
spread  through  Europe,  across  Asia  and  into  Latin  America 
and  Africa  affords  a striking  illustration  of  the  readiness  with 
which  even  supposedly  backward  peoples  seize  upon  economic 
improvements  which  are  of  evident  advantage. 

A natural  resource  that  ran  out  of  the  ground,  that  could  be 
pumped  across  mountains  and  plains  in  pipes,  that  was  refined 

8 


at  a low  cost,  yielding  over  two  hundred  products  such  as 
lubricating  oils,  gasoline,  kerosene,  benzine,  parahne,  etc.,  many 
of  which  met  a universal  demand,  was  well  calculated  to  make 
its  possessors  rich. 

The  oil  industry  of  the  United  States  (the  United  States 
produced  90  per  cent,  of  the  world's  oil  as  lately  as  1880,  and 
is  to-day  producing  about  65  per  cent.)  fell  into  the  hands  of 
a small  group  of  men  who  have  probably  made  more  money, 
dollar  for  dollar,  out  of  their  oil  investments,  than  have  the 
investors  in  any  other  major  industry. 

2.  Oil  Empires. 

John  D.  Rockefeller  and  a number  of  his  associates  set  up 
one  of  the  most  important  landmarks  in  the  economic  history 
of  the  United  States  when  they  organized  the  Standard  Oil 
Company  in  1870.  The  business  atmosphere  of  the  time  was 
dominated  by  the  idea  of  competition — the  common  assumption 
being  that  competition  was  not  only  inevitable,  but  that  it  was 
“the  life  of  trade." 

Mr.  Rockefeller  held  a different  view.  His  ideal  was  a 
large,  well  organized,  efficiently  managed  industrial  unit,  based 
on  the  principle  of  co-operation  rather  than  of  competition, 
and  from  his  first  investment  in  an  oil  refinery  in  1862,  through 
the  organization  of  the  Standard  Oil  Company,  and  during  the 
succeeding  years,  Mr.  Rockefeller  did  his  best  to  get  his  poten- 
tial competitors  to  come  inside  and  share  the  benefits  of  joint 
effort.  He  never  insisted  on  playing  a lone  hand,  but  sur- 
rounded himself  with  such  men  as  William  Rockefeller,  S.  V. 
Harkness,  and  H.  M.  Flagler.  For  the  motto:  “Producers 
compete!"  Mr.  Rockefeller  substituted:  “Producers  unite!" 
and  acting  on  this  principle,  within  ten  years  he  had  under 
Standard  Oil  control  more  than  nine  tenths  of  the  oil  refining 
business  of  the  country.  This  was  the  first  great  demonstra- 
tion, in  the  American  business  world,  of  the  precept:  “In 

union  there  is  strength." 

The  position  of  the  Standard  Oil  Co.  was  rendered  still  more 
secure  by  its  control  of  the  pipe  lines  through  which  the  oil 
was  transported,  by  its  rebate  contracts  with  the  railroads,  by 
its  ruthless  wars  on  stubborn  competitors,  and  by  the  very 
efficient  way  in  which  its  business  aff  airs  were  conducted. 

Standard  Oil  profits  were  large  from  the  outset.  A number 
of  government  investigations  show  that  between  1882  and  1906 
the  total  of  cash  dividends  paid  by  the  company  was  $551 

4 


millions,  which  was  an  average  of  24  per  cent,  per  year  on  the 
outstanding  stock.  In  addition  to  the  dividends,  there  were 
surpluses  that  made  the  total  profit  account  for  the  period 
about  $7 1 4 millions.  The  figures  are  well  summarized  in 
Chapter  5 of  “The  Trust  Problem”  (Eliot  Jones.  New  York, 
Macmillan,  1921). 

Here  was  a fateful  combination:  a valuable  and  very  limited 
natural  resource;  the  principle  of  industrial  co-operation; 
enormous  profits  on  a rapid  turn-over,  heaped  up  in  great  sur- 
plus funds.  The  result  was  inevitable.  Standard  Oil  quickly 
became  one  of  the  masters  of  American  public  life,  and  those 
who  questioned  its  sway  or  crossed  its  path  made  a quick  exit 
from  public  office.  Public  investigations  followed  attacks  by 
private  “muck-rakers,”  and  so  insistent  was  the  public  demand 
for  action  that  on  May  11,  1911,  the  United  States  Supreme 
Court  handed  down  a decree  declaring  the  Standard  Oil  Co.  a 
trust  in  restraint  of  trade,  and  ordering  its  dissolution  into  a 
number  of  constitutent  companies,  such  as  the  Standard  of 
New  Jersey,  the  Standard  of  Indiana,  and  the  like.  The  events 
that  followed  throw  an  interesting  side-light  on  the  relative 
power  of  the  Supreme  Court  and  of  Standard  Oil. 

Standard  Oil  stock,  at  the  time  of  the  Supreme  Court  decree, 
had  a paper  value  of  about  $98  millions.  During  the  next  ten 
years,  the  entire  cash  and  stock  dividends  paid  by  the  “dis- 
solved” companies  (The  Standard  Oil  Properties,  as  they  are 
now  called)  had  a market  value,  in  1921,  of  $1,833  millions — 
more  than  eighteen  times  the  capital  value  of  the  property  ten 
years  before.  The  market  value  of  the  stock  of  the  dissolved 
companies  in  1921  was  $3,276  millions,  or  about  35  times  the 
capital  value  in  1911.  Then,  too,  the  volume  of  dividends  has 
been  steadily  mounting  year  after  year. 

This  is  merely  the  profit  side  of  the  problem.  The  really 
significant  development  is  the  widespread  control  exercised  by 
the  Standard  interests  over  the  productive  machinery  of  the 
United  States  and  of  the  world.  This  matter  has  recently 
been  covered  in  great  detail,  and  the  results  published  in  the 
“Hearings  on  the  High  Cost  of  Gasoline”  conducted  before  the 
United  States  Senate  Committee  on  Manufactures.  Space 
permits  only  of  a brief  summary  of  the  organization  of  one  of 
the  Standard  companies — the  Standard  of  New  Jersey. 

The  Standard  Oil  Company  of  New  Jersey  drills  oil  wells, 
pumps  them,  refines  the  crude  oil  into  many  forms  and  sells 
the  product — mostly  abroad.  It  has  three  refineries  in  New 
Jersey;  one  each  in  Maryland,  Oklahoma,  West  Virginia, 

I 


Louisiana,  British  Columbia,  Nova  Scotia,  Peru  and  Mexico. 
Its  pipe  lines  cover  the  important  oil  territories  of  eastern 
United  States;  it  has  over  half  a million  tons  of  ocean-going 
tank  steamers;  it  makes  its  own  cans,  cases,  barrels,  etc. 
Among  its  subsidiaries  are  five  companies  doing  business  in 
France;  three  each  in  Holland,  Norway  and  Switzerland;  two 
each  in  Belgium,  Germany,  Poland,  Italy  and  England,  and 
one  each  in  Canada,  Peru,  the  West  Indies,  Czechoslovakia, 
Mexico,  Denmark,  Finland,  Canada,  Spain,  Hungary,  Austria, 
Roumania,  Jugo-Slavia,  Danzig,  the  Azores,  Bolivia  and  Vene- 
zuela. Details  regarding  this  vast  organization,  which  literally 
covers  the  earth,  may  be  found  in  the  Senate  Committee  Report. 

The  Standard  of  New  Jersey  is  only  one  of  the  Standard 
Oil  Properties,  and  the  Standard  Oil  Properties  is  only  one 
of  the  many  oil  empires  that  have  been  built  in  the  United 
States  and  in  Europe  during  the  brief  period  in  which  oil  has 
mounted  to  a position  of  such  supreme  industrial  and  diplo- 
matic importance. 

3.  The  Oil  Revolution, 

Meanwhile  the  oil  industry  itself  had  been  revolutionized. 
In  the  early  years  it  provided  light  and  heat  and  lubricants. 
To-day  its  strategic  contribution  is  power. 

This  transformation  was  brought  about  primarily  by  the 
invention  of  the  internal  combustion  engine.  The  steam  engine 
developed  power  by  applying  heat  to  water  and  admitting  the 
steam  thus  produced  into  the  ends  of  an  enclosed  cylinder.  The 
internal  combustion  engine  developed  power  by  dropping  an 
explosive  gas  directly  into  the  cylinder  and  igniting  it  with 
an  electric  spark.  The  steam  engine,  coal  driven,  required  a 
relatively  large  and  cumbersome  equipment.  The  gas  engine 
could  be  tucked  away  in  a buggy,  in  a row-boat,  or  a balloon. 
The  essential  improvements  which  were  embodied  in  the  in- 
ternal combustion  engine  (made  for  the  most  part  between 
1900  and  1910)  yielded  new  means  of  land,  water  and  air 
transportation  in  the  form  of  the  motor  car,  the  motor  boat, 
the  submarine  and  the  heavier-than-air  flying  machine. 

It  is  not  yet  possible  to  measure  the  economic  and  social 
effects  of  these  new  means  of  transport.  So  recent  are  the 
inventions,  and  so  sudden  has  been  the  development  of  these 
new  human  activities  that  their  ultimate  results  are  still  a 
matter  for  speculation.  The  facts  themselves  are  well  illus- 
trated by  the  phenomenal  rise  of  the  automobile  industry  in 

tf 


the  United  States.  In  1900,  there  were  13,824  registered  autos 
in  the  United  States;  in  1910,  there  were  468,497,  while  in 
1922  there  were  12,239,140.  The  automobile  industry  has 
literally  been  created  within  the  past  fifteen  years. 


The  engines  which  drove  motor  boats,  airplanes  and  auto- 
mobiles used  refined  and  high-grade  oils.  At  about  the  same 
time  that  they  were  being  brought  on  the  market,  an  engineer 
named  Diesel  produced  an  engine  that  subjected  crude  oil  to 
great  pressure  and  thus  made  it  usable,  particularly  in  heavy 
engines.  Refined  oils  were  expensive.  Crude  oil  was  dirt- 
cheap. 

Still  the  Diesel  engine  did  not  supplant  the  coal  driven 
machinery  in  the  ocean  liner  and  the  battle-ship.  That  result 
was  accomplished  by  a device  which  sprayed  crude  oil,  mixed 
with  compressed  air,  under  the  boilers  of  ocean-going  ships. 
The  result  was  immediate.  Coal  burning  ships  were  doomed 
while  oil  was  available. 

Ton  for  ton,  oil  contains  more  fuel  value  than  coal,  and  in  a 
more  available  form.  Oil,  as  a fuel  for  ships,  thus  enlarges 
the  cruising  radius  of  ships  about  fifty  per  cent,  while  it  re- 

7 


duced  the  amount  of  bunkerage  space  by  thirty  per  cent.  The 
oil  burning  ship  therefore  sails  farther  without  re-fueling,  and 
carries  a greater  net  tonnage  of  freight.  Beside  that,  oil  is 
more  economical  to  handle  than  coal,  since  it  can  be  sent  aboard 
through  a pipe,  and  conducted,  in  the  same  manner  to  the 
boilers.  This  method  of  burning  fuel-oil  compelled  all  of  the 
leading  commercial  companies  to  adopt  oil  for  their  new  and 
their  fast  ships. 

4.  Oil  in  the  Great  War. 

But  this  was  only  the  commercial  side  of  the  oil  revolution. 
The  new  fuel  modified  the  whole  method  of  warfare. 

The  four  new  and  decisively  important  transport  factors 
developed  during  the  late  war  were  the  submarine,  the  airplane, 
the  tank  and  the  motor  transport  service.  The  country  which 
had  only  coal  could  use  no  one  of  these  devices,  but  was  con- 
fined to  the  steam-engine  and  the  horse  on  land,  and  the  coal- 
burning ship  at  sea.  The  oil-rich  nation  could  make  war  in  the 
air;  could  transport  its  armies  in  motor  cars,  which  are  much 
more  mobile  than  steam  engines ; could  fight  with  land  battle- 
ships and,  because  of  the  less  weight  of  oil  fuel,  could  mount 
heavier  naval  guns  than  its  coal-using  rival. 

The  Germans  had  coal  in  abundance,  but  little  oil.  German 
armies  moved  in  trains  or  walked.  The  Allies  had  an  abun- 
dance of  oil.  Their  armies  were  more  mobile;  their  air  fleets 
were  better  supplied  with  fuel;  their  submarines  had  an  abun- 
dance of  motive  power,  and  their  battle  fleets  were  being  rapidly 
transformed  to  the  oil-burning  basis. 

Thus  Francois  Delaisi  in  his  “Oil”  describes  the  position  of 
France:  “In  December,  1917,  when  the  cartel  of  our  ten  oil 
merchants  which  had  undertaken  to  supply  our  armies,  ad- 
mitted that  it  was  powerless  to  fulfil  its  engagements  and  that 
its  stocks  would  be  exhausted  in  March,  1918,  on  the  eve  of 
the  Spring  Campaign,  M.  Clemenceau  addressed  a despairing 
appeal  to  President  Wilson. 

“Upon  the  orders  of  the  latter — and  in  spite  of  certain 
intrigues  on  the  part  of  the  French  group — the  War  Serv- 
ice Committee,  consisting  of  the  great  heads  of  the  Ameri- 
can industry,  immediately  placed  all  the  required  tankers  at 
the  disposal  of  France.  Thanks  to  the  reserves  thus  built  up 
at  the  time  of  the  great  German  push  in  Picardy,  Marshal  Focli 
was  able  to  bring  up  heavy  reinforcements  in  motor  lorries  and 
fill  the  gaps  where  the  British  front  had  been  broken  ...  it 

8 


has  been  well  said  that  'the  victory  of  the  Allies  was  the  vic- 
tory of  the  lorry  over  the  locomotive/  ” (p.  29.)  , 

Lord  Curzon,  at  a dinner  to  the  Inter-Allied  Petroleum 
Council  (Nov.  21,  1918)  put  the  matter  thus:  “The  Allies 
floated  to  victory  on  a wave  of  oil.”  The  multitude  ascribed 
the  triumph  to  the  soldiers.  The  more  experienced  statesmen, 
who  were  on  the  inside  of  the  national  councils,  understood 
that  the  triumph  of  the  Allies  was  the  triumph  of  superior  air- 
fleets,  naval  units,  and  of  superior  army  mobility  due  to  the 
use  of  motor  cars.  The  men  in  the  trenches  fought  equally 
well  on  both  sides,  as  anyone  who  was  at  the  front  over  a long 
period  of  time  is  ready  to  admit. 

The  World  War  was  thus  an  oil-won  war,  proving  con- 
clusively that  the  national  supremacy  of  the  future  rested  on 
oil  as  a source  of  military  and  naval  power. 

5.  Oil  Sweeps  Into  Politics. 

No  Great  War  was  necessary  to  show  thinking  people  the 
direction  in  which  the  economic  wind  was  blowing.  As  far 
back  as  1910  the  responsible  statesmen  and  business  men  of 
Great  Britain  had  seen  what  was  coming. 

The  modern  British  Empire  was  built  upon  coal.  As  one 
writer  has  very  effectively  put  it:  Imperial  Britain  owes  her 
supremacy,  not  to  the  number  and  tonnage  of  her  ships  alone, 
but  also  to  her  monopoly  of  fuel. 

“Thanks  to  the  numerous  coaling  stations  which  Britain  has 
scattered  over  all  the  steamship  lanes  of  the  world  not  a single 
ship,  whether  of  war  or  commerce,  can  move  upon  the  seas  save 
by  her  grace.  Her  coal,  moreover,  assures  to  her  vessels,  large 
and  small,  a cargo  of  outward-bound  freight  which  is  certain  to 
find  sale  in  any  land;  British  steamers  can  always  sail,  there- 
fore, with  full  holds — a fortunate  circumstance  that  enables 
them  to  give  lower  return  freight  rates  than  the  ships  of  any 
other  country.  For  this  reason  merchandise  consigned  to 
England  pays  lower  transportation  charges  than  freight  dis- 
tributed to  any  other  land,  and  English  industry  benefits  cor- 
respondingly by  this  genuine  advantage  in  the  purchase  of  raw 
materials  abroad.  This  is  the  great  advantage  in  the  British 
campaign  for  the  conquest  of  international  markets,  and  it 
may  be  said  that  the  whole  commercial  and  industrial  pros- 
perity of  England,  for  a century  past,  has  rested  on  this 
heritage  of  coal.”  (E.  Eberlin  in  La  Grande  Review.  Living 
Age.  Vol.  311,  pp.  693-4.) 


9 


By  1910  it  was  apparent  to  far-seeing  men  that  the  con- 
trol of  land  and  sea  and  air  in  the  future  would  follow  the  con- 
trol of  oil — a material  “more  precious,  more  complete  in  its 
dominating  power  over  the  planet  than  gold  itself.”  (“La 
Lutte  Mondiale  pour  le  Petrol.”  Pierre  I’Espangnol  de  la 
Tramereye.  Paris,  La  Vie  Universitaire,  1921,  pp.  16-17). 
Before  the  power  which  oil  gives  to  its  possessors,  all  else 
must  give  way.  “Armies,  navies,  money,  and  even  entire  popu- 
lations count  for  nothing  as  against  the  lack  of  oil.”  (the 
same  p.  100.) 


The  British  Empire  had  been  built  upon  coal.  A series  of 
simple  inventions,  made  for  the  most  part  between  1900  and 
1910  had  substituted  oil  for  coal  as  the  strategic  fuel  of  in- 
dustry. Great  Britain  had  ample  coal  reserves,  estimated  at 
189,553  million  tons,  which  constituted  about  a quarter  of  the 
reserves  of  all  Europe.  She  had  no  oil . 

Commerce,  naval  supremacy,  insurance,  banking,  the  secur- 
ing of  raw  materials  on  favorable  terms,  surplus  investment 
funds — all  hung  in  the  balance.  Without  oil,  they  must  all  be 
lost  to  her  oil-rich  rivals.  The  economic  plight  of  Britain  was 

10 


critical.  A few  men  including  Sir  Marcus  Samuel,  Chairman 
of  the  Shell  Transport  Co.,  Lord  Cowdray,  head  of  the  Pear- 
son Interests,  Lord  Curzon,  and  Sir  John  Cadman,  went  to 
work,  silently  and  with  true  British  zeal. 

6.  Save  the  Empire! 

Never  had  British  resourcefulness,  strategy  and  courage 
been  more  sharply  tested.  Never  was  Britain's  boast  of  her 
ability  to  take  care  of  herself  more  justified. 

The  British  Isles  are  oil-poor.  With  the  exception  of  some 
unimportant  oil-shale  deposits  in  Scotland,  they  contain  no 
commercially  available  oil.  The  same  thing  is  true  of  all 
Northwestern  Europe.  The  center  of  modern  industrialism 
has  not  been  supplied  by  nature  with  enough  oil  to  meet  its 
needs  for  one  month  in  the  twelve. 

Where,  then,  is  the  world's  oil? 

Roughly  speaking,  the  apparent  reserves  of  oil  which  are 
now  commercially  available  total  a little  more  than  40  billions 
of  barrels.  Of  this  amount  North  America  is  credited  with 
12.5  billion  barrels  (United  States,  seven  billions,  Mexico,  five 
billions,  Canada,  half  a billion)  ; Asia  is  credited  with  10  bil- 
lions, of  which  six  billions  are  in  Persia  and  Mesopotamia ; 
South  America  is  credited  with  10  billions  (three  billions  in 
Argentina  and  Bolivia,  six  billions  in  Colombia,  Venezuela  and 
Peru),  and  Russia  with  six  billions  of  barrels.  The  scattering 
remainder  is  in  the  East  Indies,  the  Balkans,  in  the  Philip- 
pines, in  Australia  and  so  on.  The  bulk  of  the  world's  oil, 
however,  is  concentrated  in  a very  few  comparatively  small 
areas.  In  Europe,  almost  all  of  the  reserve  oil  is  in  the  south- 
east corner  of  the  continent. 

The  British  Empire  of  1910  was  not  an  oil  empire.  Quite 
the  contrary,  it  was  notably  lacking  in  oil.  Britain  was  the 
ostensible  mistress  of  the  world,  but  fully  nine-tenths  of  the 
world's  oil  resources  lay  outside  of  her  territories.  To  get  an 
adequate  supply  of  oil  for  the  Empire  would  be  a master  stroke 
of  commercial  enterprise  and  of  diplomacy. 

It  was  apparent  from  the  beginning  that  the  British  could 
not  work  in  the  open  without  arousing  their  competitors. 
Therefore  they  went  to  work  under  a number  of  disguises. 
The  Shell  Transport  Co.,  for  example,  which  was  engaged  in 
the  mother-of-pearl  business,  was  used  as  a likely  agency  for 
the  British  control  of  oil  in  the  East.  The  Royal  Dutch,  a 
company  ostensibly  controlled  in  Holland,  furnished  another 

II 


admirable  cover.  The  Mexican  Eagle  Oil  Co.,  handled  the 
interests  of  the  Pearson  group  in  Mexico.  Within  a few  years 
these  companies  had  secured  important  oil  concessions  in  Rou- 
mania.  Russia,  California,  Oklahoma,  Texas,  Trinidad,  Mexico, 
The  Dutch  East  Indies,  and  Egypt.  The  apparent  diversity 
of  these  interests  made  it  possible  for  the  British  Admiralty  to 
drop  a hint  to  the  effect  that  self-protection  demanded  British 
participation  in  oil  development.  The  power  of  the  Crown  was 
therefore  placed  behind  the  Burma  Oil  Co.  and  the  Anglo- 
Persian  Oil  Co.  So  quickly  was  the  work  done  that  in  March, 
1920,  Sir  E.  Mackay  Edgar  was  able  to  give  an  interview  to 
the  London  Times,  in  which  he  said: 

“I  should  say  that  two-thirds  of  the  improved  fields  of  Cen- 
tral and  South  America  are  in  British  hands.  In  Guatemala, 
Honduras,  Nicaragua,  Costa  Rica,  Colombia,  and  Ecuador, 
a decisive  and  really  overwhelming  majority  of  the  concessions 
are  held  by  British  subjects.  . . . The  Shell  group  owns 

exclusively  or  controls  interests  in  every  important  field  in  the 
world,  including  the  United  States,  Russia,  the  Dutch  East 
Indies,  Roumania,  Egypt,  Venezuela,  Trinidad,  India,  Ceylon, 
the  Malay  States,  North  and  South  China,  Siam,  the  Straits 
Settlements  and  the  Philippines. 

“If  their  present  curve  of  consumption  is  continued,  Ameri- 
cans, in  ten  years  will  be  under  the  necessity  of  importing  500 
million  barrels  of  oil  yearly,  at  $2  a barrel — a very  low  figure 
— and  that  means  an  annual  payment  of  $1,000,000,000  per 
annum,  most,  if  not  all  of  which  will  find  its  way  into  British 
pockets.” 

After  pointing  out  the  immense  economic  advantage  held  by 
the  British  as  a result  of  this  situation,  the  statement  adds: 
“The  British  position  is  impregnable.” 

Ten  years  before,  Britain  controlled  practically  no  oil.  In 
1920  she  was  independent.  With  the  rapid  exhaustion  of  the 
American  fields,  the  British  oil  interests  will  dominate  the  oil 
industries  of  the  world. 

7.  The  Oil  Stampede. 

The  statement  came  as  a revelation  to  the  American  people. 
For  fifty  years  the  oil  wells  of  the  United  States  had  supplied 
from  two-thirds  to  nine-tenths  of  the  world's  oil;  the  reserves 
of  the  southwest  seemed  inexhaustible ; the  American  position 
was  deemed  secure,  and  yet  here  was  a statement  from  a re- 
sponsible source  tint  within  ten  years,  the  American  people 
would  be  dependent  on  Britain  for  their  oil. 


Resolutions  of  inquiry  were  introduced  into  Congress,  the 
newspapers  took  up  the  cry,  and  on  May  2,  1920,  the  Geolog- 
ical Survey  issued  a report  showing  that  the  world,  outside  of 
the  United  States,  was  consuming  200  million  barrels  of  oil 
per  year.  At  this  rate  of  consumption,  the  reserves  of  the 
remainder  of  the  world  would  last  approximately  250  years. 
The  United  States,  with  its  consumption  (1920)  of  400  million 
barrels  per  year  could  expect  its  reserves  to  last  only  18  years. 

Acting  Secretary  of  State  Polk  intensified  the  situation  by 
submitting  a report  which  went  to  Congress  May  17,  1920,  in 
which  he  asserted  that;  “The  policy  of  the  British  Empire  is 
reported  to  be  to  bring  about  the  exclusion  of  aliens  from  the 
control  of  the  petroleum  supplies  of  the  Empire,  and  to  en- 
deavor to  secure  some  measure  of  control  over  oil  properties  in 
foreign  countries  . . . 

“1.  By  debarring  foreigners  and  foreign  nationals  from 
owning  or  operating  oil  producing  properties  in  the 
British  Isles,  Colonies  and  protectorates. 

“2.  By  direct  participation  in  ownership  and  control  of 
petroleum  properties. 

“8.  By  arrangements  to  prevent  British  oil  companies 
from  selling  their  properties  to  foreign  owned  or  con- 
trolled companies. 

“4.  By  orders  in  Council  that  prohibit  the  transfer  of 
shares  in  British  oil  companies  to  other  than  British 
subjects  or  nationals.” 

This  statement  was  confirmed  and  strengthened  by  subse- 
quent communications  from  the  State  Department.  The  British 
were  not  content  to  get  concessions  that  gave  them  the  control 
of  the  bulk  of  the  world's  oil.  They  were  apparently  determined 
that  no  stone  would  be  left  unturned  to  prevent  British  sub- 
jects from  disposing  of  their  oil  properties.  Despite  the  fact 
that  British  companies  had  obtained  free  access  to  the  oil  fields 
of  the  United  States,  the  American  investor  was  excluded  from 
British  territory. 

At  almost  the  same  time  an  agreement  was  reached  at  San 
Remo  between  France  and  Britain  (April  24,  1920)  under 
which  it  was  arranged  that  all  except  British  and  French  sub- 
jects should  be  excluded  from  oil  territory  in  certain  French 
and  British  possessions. 

8.  A World  Oil  Trust. 

Later  investigations  showed  that  practically  the  entire  oil 
industry  of  the  world  was  in  the  hands  of  two  great  combines — 

18 


the  Royal  Dutch-Shell  Combine  and  the  Standard  Oil  Combine. 
The  most  recent  statement  of  the  facts  regarding  the  former 
group  is  contained  in  a “Report  of  the  Federal  Trade  Com- 
mission on  Foreign  Ownership  in  the  Petroleum  Industry.  Feb. 
12,  1923.” 

Royal  Dutch  was  organized  in  1890;  Shell  Transport  in 
1897.  Both  companies  have  paid  handsome  dividends.  Royal 
Dutch,  between  1910  and  1921  averaged  42  per  cent,  to  the 
common  stock  holders;  Shell  Transport  paid  average  dividends, 
between  1909  and  1921,  of  31  per  cent.  Both  are  holding  com- 
panies, and  their  profits  are  merely  the  net  returns  from  the 
underlying  concerns.  The  two  organizations  were  affiliated  in 
1907*  Royal  Dutch  taking  60  per  cent,  of  the  stock  in  sub- 
sidiaries and  Shell  Transport  taking  40  per  cent. 

At  the  present  time  there  are  about  103  of  these  subsidiaries 
operating  in  Egypt,  Russia,  Dutch  East  Indies,  Malay  States, 
India,  China,  Korea,  Manchuria,  Philippines,  Siam,  Straits 
Settlements,  Roumania,  Australia,  New  Zealand,  South  Africa, 
Venezuela,  Mexico,  Denmark,  Finland,  Holland,  Jugoslavia, 
Italy,  Poland,  Norway,  Japan,  Canada,  United  Kingdom, 
Sweden,  Trinidad  and  the  United  States. 

The  proportion  of  petroleum  production  controlled  by  the 
Royal  Dutch-Shell  interests  is  given  as  2 per  cent,  in  the 
United  States;  97  per  cent  in  the  Dutch  East  Indies;  98  per 
cent,  in  British  Borneo;  100  per  cent  in  Egypt;  29  per  cent,  in 
Roumania;  100  per  cent,  in  Venezuela;  27  per  cent,  in  Mexico, 
and  16  per  cent  in  Trinidad. 

The  strategic  power  of  the  Royal  Dutch-Shell  group  lies  in 
their  120  fuel-oil  bunkering  stations,  which  are  located  in  every 
important  port  of  call  all  round  the  world.  Ten  of  them  are 
in  the  United  States. 

This  report  of  the  Federal  Trade  Commission  confirms  the 
earlier  statements  with  regard  to  the  discriminations  against 
American  oil  interests  by  the  British  and  other  governments. 

Sir  Mackay  Edgar  has  told  the  truth.  As  to  his  prophecy 
concerning  the  imports  of  oil  by  the  United  States,  during  the 
year  ending  June,  1922,  imports  of  crude  petroleum  were  at 
the  rate  of  135  million  barrels  per  year,  and  for  the  year  end- 
ing June,  1923,  at  the  rate  of  90  million  barrels  per  year. 

Meanwhile  the  struggle  for  oil  went  on  unabated.  The 
Genoa  Conference  “reeked  with  oil.”  At  Lausanne,  Lord 
Curzon  said  simply  and  emphatically  that  the  British  Govern- 
ment would  fight  before  it  would  leave  Mosul.  Then  came  the 
Chester  Concessions,  under  which  American  interests  laid  claim 


to  important  oil  lands  in  Asia  Minor  that  were  also  claimed  by 
France,  through  a pre-war  concession,  and  by  Britain  under  a 
mandate  from  the  League  of  Nations. 

9.  The  First  Oil  War. 

When  the  original  statements  appeared  regarding  the  British 
policy  of  excluding  non-British  subjects  from  British  oil  ter- 
ritory, Franklin  K.  Lane  spoke  out  briefly  and  pointedly:  “A 
policy  of  this  description  has  inspired  among  Americans  the 
fear  that  Britain  in  acting  thus,  desired  to  check  the  naval  de- 
velopment of  the  United  States.  Now,  do  such  proceedings 
lead  to  peace  or  war?” 

Meanwhile  the  Standard  Oil  Company  had  invaded  France. 
The  French  Government  was  about  to  turn  the  control  of 
petroleum  back  into  private  hands,  and  the  Standard,  through 
the  organization  of  several  subsidiaries  prepared  to  take  care 
of  the  business.  This  accounts  for  the  fact  that  the  Standard 
of  New  Jersey  has  more  subsidiaries  in  France  than  in  any 
other  country  of  Europe. 

Such  was  the  ostensible  motive  behind  the  move  of  Standard 
Oil  into  France.  But  this  was  mere  camouflage.  In  Mesopo- 
tamia and  Persia  there  were  oil  reserves  estimated  to  equal  the 
total  oil  reserves  of  the  United  States.  These  reserves  were 
largely  in  British  controlled  territory,  but  under  the  San  Remo 
agreement,  there  was  a chance  for  French  interests  to  share 
in  their  development.  Beside,  the  French  government  was  the 
only  real  rival  that  the  British  Government  had  left  in  Europe 
and  the  Near  East,  and  as  the  competition  between  the  two 
was  very  intense,  there  seemed  nothing  more  logical  than  for 
the  Standard  Oil  interests  to  use  the  French  Government  to 
secure  a share  of  Near  East  oil  concessions. 

The  way  in  which  the  drama  developed  is  thus  summarized 
by  a keen  observer  who  has  spent  the  past  ten  years  studying 
this  very  problem: 

“The  war  between  the  Greeks  and  the  Turks  was  only  that 
in  name.  It  was  actually,  as  everyone  aware  of  the  inner  facts 
knows,  a war  between  England  and  France.  The  Greeks  were 
armed  and  financed  and  supported  by  England  and  transported 
in  English  ships.  The  Turks  were  armed  and  transported  and 
largely  drilled  and  officered  by  French.  And  all  of  this  was  a 
struggle  between  these  two  powers  for  possession  of  the  re- 
serves of  oil.  In  the  struggle  France  was  supported  and  even 


15 


dominated  by  American  financial  interests.  To  push  the  matter 
back  to  its  last  analysis,  the  war  between  Greece  and  Turkey 
was  actually  a war  between  the  Shell-Royal  Dutch  Oil  Co., 
which  is  now  the  property  of  the  British  Government,  and  the 
Standard  Oil  Company  of  America  which  now  largely  operates 
the  French  Government  and  which  owns  the  twelve  leading 

newspapers  of  France Whoever  controls  the  oil 

supplies  of  the  world  will  control  the  world  economically  and 
politically,  and  the  whole  world  is  being  plunged  into  chaos 
over  a struggle  for  this  control.” 

This  statement  is  not  documented.  It  represents  the  con- 
clusions of  a careful  student,  and  of  an  observer  who  has  had  a 
rare  opportunity  to  see  European  diplomacy  from  the  inside. 
Significantly,  however,  the  deductions  which  this  man  reaches 
correspond  accurately  with  the  superficial  facts  as  they  range 
themselves  before  the  student  on  the  American  side  of  the 
Atlantic.  Certainly  the  Greeks  had  English  backing  in  the 
late  war,  as  the  Turks  had  French  backing.  Certainly  England 
and  France  are  manoeuvering  for  position  in  the  Near  East. 
Just  as  surely  Royal  Dutch-Shell  and  Standard  Oil  are  mov- 
ing heaven  and  earth  to  capture  the  immense  oil  reserves  of 
Mesopotamia.  As  for  the  capacity  of  the  Standard  Oil  to  man- 
age the  French  Government,  its  record  in  the  United  States 
seems  to  indicate  that  the  organization  has  a real  genius  for 
such  a job. 

What  a picture  this  Near  East  scramble  presents!  What  a 
sight  for  the  gods ! Greek  farmer  boys  and  artisans  lay  aside 
their  tools,  and,  in  the  name  of  Jesus,  don  uniforms  and  sail 
away  to  fight  against  the  heathen  Turk,  while  Turk  farmer 
boys  and  artisans  lay  aside  their  tools  and  arm  themselves  to 
destroy  the  unbelievers.  On  either  side  the  soldiers  pass  in 
bold  array.  Public  men  harangue  and  flatter  them,  priests  ex- 
hort them,  newspapers  extol  them,  crowds  applaud  them.  They 
reach  the  front;  camp  in  overcrowded,  disease-ridden,  water- 
less places;  march  through  the  baking  heat,  ragged,  half- 
starved;  they  ravish  the  country-side,  trampling  crops,  sacking 
farms,  destroying  olive  groves,  burning  villages;  they  meet  in 
battle,  sweat,  bleed,  suff  er,  agonize,  die.  For  them  it  is  a war 
to  vindicate  a faith,  and  to  save  their  hearth-stones  from  dis- 
honor. But  behind  them,  in  London,  Paris  and  New  York,  sit 
old,  cynical,  scheming  men,  laying  the  plans  for  the  next  cam- 
paign, and  wondering  whether  the  result  of  a given  battle  will 
be  an  extra  dividend  for  Shell  Transport  or  for  Standard  Oil. 


18 


10.  The  Logic  of  Oil  Diplomacy. 

What  of  the  future? 

E.  C.  Eckel  in  his  study  “Coal,  Iron  and  War”  (Holt,  1920) 
points  out  that  modern  wars  have  an  economic  background; 
that  oil  has  become  one  of  the  imperatively  needed  economic 
resources;  that  it  is  limited  in  its  distribution;  that  it  is  already 
the  object  of  a struggle  which  must  become  fiercer  as  the  de- 
mand for  oil  increases  against  a decreasing  supply.  If  the  last 
war  was  an  iron  war,  he  concludes,  the  next  war  may  well  be 
an  oil  war. 

With  commendable  thoroughness  Mr.  Eckel  follows  this  pro- 
posal by  making  the  following  recommendations:  (“The  An- 
nalist” for  Nov.  14,  1921). 

“5.  The  first  duty  of  our  navy  in  time  of  war  will  be  to 
secure  the  Caribbean.  The  first  duty  of  our  expe- 
ditionary forces  will  be  to  furnish  protection  to  the 
oil  fields  of  this  extra  territorial  region. 

“7-  Countries  with  adequate  commercial  fleets  and  navies 
will  look  rather  to  the  three  South  American  zones — - 
the  North  coast,  the  west  coast  and  the  south  east 
coast,  all  of  which  have  immense  petroleum  reserves. 
The  pressure,  there  and  elsewhere,  will  be  increased 
year  by  year,  and  the  financial  and  commercial  rivalry 
may  at  times  have  important  political  and  military 
results.” 

The  countries  about  the  Caribbean  are  “independent”  na- 
tions, but,  alas ! when  the  independence  of  a weak  nation  is 
weighed  against  important  oil  reserves,  it  is  mere  dust  in  the 
balance.  The  great  imperial  countries  must  have  oil,  and  in 
order  to  obtain  it,  they  must  go  where  oil  is  to  be  found.  As 
each  oil  field  is  discovered,  and  its  richness  is  proved,  it  will 
be  the  object  of  a fierce  rivalry — of  a life  and  death  struggle 
between  those  who  are  contending  for  the  economic  and  politi- 
cal supremacy  of  the  world. 

What  does  it  all  mean  ? 

Franklin  K.  Lane  gave  the  answer  in  1920 — this  means  war! 

11.  What  Is  War? 

What  is  war? 

General  Sherman  answered:  “War  is  hell!” 

This  was  a description  of  the  actual  fighting.  Sherman  was 
thinking  of  the  murderous  assault  and  the  savage  defense;  of 

19 


the  sweating,  struggling,  aching,  weary  men;  of  the  mangled 
bodies;  of  the  terrible  heat  of  the  noon-day  sun  and  of  the 
long,  long  nights  among  the  dead  and  dying  on  the  field  of 
battle;  of  the  hospitals  gorged  with  fragments  of  stalwart  man- 
hood; of  the  pillaging,  the  burning,  the  wanton  destruction,  the 
trail  of  ruin  following  the  army  like  a spectre ; of  the  homeless, 
helpless  families,  huddled  beside  the  blackened  wheat-fields 
and  the  felled  orchards.  Sherman  searched  for  a word  to 
describe  this  orgy  of  humanly  self-inflicted  suffering,  misery, 
destruction  and  death,  and  he  hit  on  “hell.” 

These  are  the  immediate  aspects  of  war.  With  them  have 
been  associated,  time  out  of  mind,  fortitude,  heroism,  strength, 
courage,  adroitness,  vigor,  red-blooded  manhood.  Those  who 
champion  war,  and  who  find  in  it  a regenerative  social  force, 
point  to  the  tests  of  the  battlefield  as  the  fire  out  of  which  men 
come,  purged  and  purified. 

But  there  are  other  sides  of  war. 

Battles  occur  only  occasionally.  Between  them,  there  is  the 
endless  waiting,  the  monotony,  the  wearisome  routine  of  a 
service  that  is  meaningless  unless  it  leads  to  action.  And  fol- 
lowing the  battles,  there  are  the  wild  debauches  of  the  victors 
and  the  mad  despair  of  the  vanquished.  In  the  path  of  the 
moving  army  there  are  consternation  and  terror,  and  in  its 
wake,  demoralization.  The  camp  followers  are  not  a pleasant 
subject  for  contemplation,  but  they  are  just  as  much  a part  of 
every  army  as  are  the  field  pieces  or  the  soldiers  themselves. 

Again,  there  are  the  profiteers  of  war.  Behind  the  lines, 
safe  from  any  possible  harm,  these  vultures  ply  their  trades. 
Mouthing  patriotic  phrases,  wrapped  in  the  flag,  uttering  ful- 
some promises  to  the  boys  on  their  way  to  the  front,  the  makers 
of  powder  and  uniforms,  the  millers  of  wheat  and  the  jobbers 
in  wool  take  the  last  possible  penny  of  profit  for  the  things 
upon  which  the  men  at  the  front  depend  for  their  very 
existence.  While  the  soldiers  suffer  and  die  these  men  grow 
rich,  converting  the  hardships  and  the  agonies  of  the  conflict 
into  private  bank  accounts.  Sherman  had  no  word  strong 
enough  to  characterize  such  exploiters;  yet  they  are  an  in- 
evitable element  in  every  war. 

To  be  sure  there  are  not  many  profiteers.  When  their  num- 
bers are  reckoned  against  the  total  of  the  population,  they  are 
a negligible  factor. 

But  there  are  still  other  aspects  of  war. 

Men  are  by  nature  builders.  They  are  compelled,  as  a 
means  of  self-expression,  to  produce  and  create.  Some  of  them 

20 


grow  crops,  some  weave  fabrics,  some  shape  tools.  The  in- 
stinct of  workmanship  lies  at  the  root  of  man’s  nature.  It  also 
lies  at  the  foundation  of  society. 

The  world  in  which  we  live  is  built  and  maintained  by  pro- 
ductive labor.  There  is  no  other  known  method  of  supporting 
life.  Bread,  shoes,  windows,  books,  pictures,  motor-buses, 
mines,  factories,  railroads,  exist  because  of  the  creative  and 
organizing  faculties  of  human  nature.  Civilization  is  founded 
on  production.  It  is  the  great  affirmation. 

War  is  the  great  negation — the  challenge  to  the  vast  stream 
of  productivity  that  has  ebbed  and  flowed  about  the  human 
race  for  ages.  The  chief  object  of  war  is  destruction. 

The  successful  producer  is  the  one  who  creates  the  most  and 
the  best.  The  successful  soldier  is  the  one  who  destroys  the 
most  and  the  best. 

The  wars  of  old  were  fought  by  professional  soldiers,  while 
most  of  the  people  went  about  their  ordinary  occupations. 
Modern  wars  are  fought  by  whole  populations.  The  young 
men  are  drafted.  They  bleed  and  die,  bomb  and  destroy  by 
the  millions.  Men  who  are  artisans  and  craftsmen;  men  who 
love  to  feel  the  lines  of  a beautiful  carving,  or  who  dwell 
lingeringly  over  a rich  color  or  a fine  design;  men  who  fondle 
children  and  feel  the  warm  bonds  of  human  sympathy  for  all 
who  suffer  or  lack — such  men  devote  years  to  maiming  or 
murdering  their  fellows,  to  bombing  cities,  burning  stations 
and  cathedrals,  felling  fruit  trees,  dynamiting  mines  and  fac- 
tories. The  flower  of  each  nation’s  productive  manhood  is  em- 
ployed during  war,  in  systematic  destruction. 

How  can  such  things  be?  What  makes  possible  this  trans- 
formation of  the  producer  who  loves  to  create  into  a ferocious 
destroyer?  There  is  only  one  way  in  which  such  a result  can 
be  accomplished — through  the  arousing  of  fear  and  of  hate. 

Sane  men  do  not  destroy  wantonly.  No  lover  of  the  land 
will  cut  down  a fruit-tree;  no  trained  artisan  will  smash  a 
valuable  machine;  no  scholar  will  burn  a manuscript;  no 
father  will  harm  a_  child,  unless  he  is  filled  with  fear  or  with 
hate. 

Before  there  can  be  a successful  war,  or  even  a threat  of 
war,  people  must  be  whipped  into  a frenzy.  They  must  forget 
the  work  they  have  been  doing,  the  families  they  have  been 
raising,  the  friends  they  have  been  making,  and  prepare  to 
destroy  the  property  and  the  lives  of  their  “enemies.” 

Who  are  these  enemies? 


2] 


They  are  the  citizens  of  some  other  state — -ordinary  human 
beings — mechanics,  fathers  of  families,  neighbors.  But  if  this 
simple  fact  were  understood  there  could  be  no  war,  because  no 
man  in  his  right  senses  would  tear  them  to  pieces  with  bombs 
or  burn  their  houses  or  destroy  their  factories  and  railroads. 
Consequently,  the  editors,  the  teachers,  the  preachers,  the 
public  speakers,  the  photographers  and  the  advertising  men  are 
set  to  work  to  paint  the  “enemy”  as  beasts  and  monsters.  This 
is  done  regularly  as  a prelude  to  every  war,  and  since  there  are 
bad  deeds  to  the  credit  of  every  people,  it  requires  only  a little 
ingenuity  and  a touch  of  imagination  to  make  Greeks  believe 
that  all  Turks  are  children  of  the  devil,  and  to  make  Turks  be- 
lieve that  all  Greeks  are  limbs  of  the  tree  of  evil.  The  truth 
tellers  are  silenced,  the  proper  government  department  acts  as 
official  liar  for  the  administration,  the  sense  of  pity  is  numbed, 
love  and  brotherhood  are  cast  aside  and  the  nations  seethe  with 
fear  and  hate. 

Why  are  these  preparations  made?  Because  without  them 
there  could  be  no  war. 

Must  there  be  war?  Yes,  there  must  be  war  so  long  as  men 
are  bent  on  taking  their  livelihood  from  others  instead  of  pro- 
ducing it  for  themselves. 

War  is  a business.  Like  any  other  business,  it  is  not  con- 
ducted on  the  sidewalk.  Behind  the  lines  there  are  the  gen- 
eral staffs,  the  experts  in  strategy,  the  technicians,  the  military 
schools.  In  the  army  and  navy  departments  there  are  men 
whose  sole  duty  it  is  to  map  out  the  campaigns  far  in  advance 
of  their  execution;  to  design  and  to  build  guns,  forts  and 
ships;  to  experiment  with  explosives  and  poisonous  gases;  to 
construct  air-planes,  tanks  and  submarines;  to  arrange  the 
detail  for  army  operation  and  equipment — to  what  purpose? 
They  are  working  toward  the  goal  of  all  military  science — the 
destruction  of  life  and  property. 

12.  War  Is  Organized  Destruction. 

Strictly  speaking,  war  is  organized  destruction.  There  is 
nothing  impetuous,  emotional,  or  accidental  about  a war  as 
there  is  about  a street  fight.  On  the  contrary,  it  is  just  as  care- 
fully worked  out  as  the  most  methodical  business  in  the  world. 

Modern  states  spend  more  money  on  war  than  on  any  other 
single  government  activity.  Since  the  purpose  of  war  is 
destruction,  modern  states  devote  their  chief  energies  to  wiping 
out  the  wealth  and  the  life  that  have  been  accumulating 
through  the  centuries. 


22 


War  is  more  than  hell.  It  is  a disease  that  breaks  out  among 
peoples  at  intervals,  doing  immeasurable  damage.  The  last 
war,  for  example,  resulted  in  the  destruction  of  some  ten  mil- 
lions of  lives  on  the  battle-fronts;  in  the  death  of  some  25 
millions  of  civilians  from  exposure,  famine  and  plague,  and 
in  the  destruction  of  perhaps  275,000  millions  of  dollars  worth 
of  wealth,  not  to  mention  a demoralization  of  the  economic  life 
of  Europe  that  is  more  acute  five  years  after  the  war  than  it 
was  in  1918. 

Among  all  of  the  diseases  that  have  fastened  themselves  on 
the  body  social,  war  is  the  most  dramatically  disastrous.  Hence 
the  conquest  of  war  would  give  renewed  hope  to  all  of  those 
who  are  striving  for  a better  world. 

How  can  war  be  conquered?  Only  by  discovering  and  re- 
moving the  causes  that  lead  to  war.  A war  to  end  war  is  as 
grotesque  as  a cholera  epidemic  to  end  cholera.  War  will  be 
conquered  when  men  have  discovered  and  destroyed  the  germs 
that  make  war  inevitable. 

13.  Hunting  the  Germ. 

Social  diseases — like  diseases  of  the  physical  body,  arise 
from  certain  causes.  Those  causes  must  be  clearly  understood 
before  any  successful  remedy  can  be  applied. 

It  is  all  well  enough  to  call  in  a doctor  after  the  patient  has 
developed  typhoid  fever,  but  the  really  important  thing  is  to 
be  sure  that  no  one  else  gets  the  disease  from  the  same  source. 
When  a public  health  expert  is  detailed  to  fight  an  epidemic  of 
typhoid,  his  first  question  is  directed  to  the  source  of  the  dif- 
ficulty. “Where  does  this  thing  come  from?”  he  demands. 
Until  he  has  found  the  answer,  the  community  cannot  feel  safe 
from  the  spread  of  trouble. 

The  same  truth  holds  for  every  problem  that  confronts  so- 
ciety. “Where  does  this  difficulty  have  its  origin?”  is  the 
first  question  that  statesmen  must  ask  of  poverty  or  ignorance 
or  war. 

War  is  organized  destruction.  Why  do  sound-minded  men 
support  and  justify  it? 

War,  in  its  essence,  is  carried  on  as  a part  of  the  human 
struggle  for  wealth  and  for  power.  Pigou  notes  that  the 
fundamental  causes  of  war  are  “the  desire  for  domination 
and  the  desire  for  gain.”  (“The  Political  Economy  of  War.” 
London,  Macmillan,  1921,  p.  16.)  “Wars  in  the  past,”  writes 
Commons,  “have  been  fought  over  exports  of  products  and 
annexations  of  territory.”  (Address  of  the  President 

23 


American  Economic  Association,  Ann.  Meeting,  1917,  p.  12.) 
Rear  Admiral  Niblack  in  his  “Why  Wars  Come,,  quotes 
with  approval  the  statement  of  David  Jayne  Hill  that  the 
roots  of  war  “run  deep  into  the  soil  of  trade  rivalry  and  eco- 
nomic aspirations.”  (pp.  146-7).  G.  Lowes  Dickinson  hears 
“behind  the  patriotic  cries  of  the  press,  behind  the  shrieks  of 
wounded  and  dying  men,  giving  their  lives,  as  they  think,  for 
freedom  and  their  country,  the  cold  miscalculations  of  busi- 
ness men  risking  the  certainty  of  general  loss  for  small  possi- 
bilities of  individual  gain.”  (“War.”  London,  Allen  and 
Unwin,  1923,  p.  132.)  Man’s  nature  compels  him  to  search 
for  food.  It  is  equally  emphatic  in  its  urge  toward  the 
accumulation  of  power.  In  a highly  evolved  economic  society, 
the  two  go  hand  in  hand — the  larger  the  volume  of  wealth, 
the  greater  the  power  which  its  owner  is  able  to  exercise  over 
his  fellows.  Hence  men,  in  their  struggle  to  live  and  to  ex- 
press themselves,  necessarily  strive  to  accumulate  wealth, 
which  is  the  touch-stone  of  modern  power. 

Here,  then,  is  an  initial  answer  to  the  question  concerning 
the  germs  of  war.  War  is  an  aspect  of  the  struggle  for  wealth 
and  for  power  that  is  being  continually  waged  between  groups 
of  human  beings. 

14.  Economic  Causes  of  War. 

Wars  in  the  past  may  have  had  their  immediate  causes — 
their  starting  points — in  personal  quarrels  over  the  posses- 
sion of  a throne  or  a woman;  in  a shooting  affray  or  an  insult 
to  a flag;  but  if  there  were  a war  every  time  individuals 
quarreled  or  were  affronted,  the  world  would  be  as  full  of 
them  as  a forest  is  full  of  leaves.  A personal  quarrel  begins 
a war  when  the  situation  is  ripe  for  war,  just  as  a match, 
dropped  on  a dry,  littered  forest  floor,  begins  a forest  fire. 
It  is  the  litter  and  the  drought  which  are  principally  respon- 
sible for  the  fire.  The  match  is  an  accident. 

Through  countless  ages  men  have  struggled  to  secure  easier 
ways  of  making  a living.  The  Jewish  tribes,  entering  the 
Jordan  Valley;  the  Shepherd  Kings,  invading  the  Valley  of 
the  Nile;  the  wild  Goths,  hurling  themselves  upon  a fertile 
Italy,  all  illustrate  that  unceasing  effort  of  the  economically 
less  favored  to  take  possession  of  the  opportunities  of  the 
economically  more  favored.  On  every  continent  there  are  a 
few  garden-spots — the  Hoang-ho,  the  Ganges,  the  Euphrates, 
the  Volga,  the  Danube,  the  Mississippi — where  food  grows 


24 


readily;  where  the  river  solves  the  problem  of  transportation, 
and  where  possession  means  comparative  ease  and  comfort  so 
far  as  the  struggle  with  nature  is  concerned.  The  inhabitants 
of  these  garden-spots  have  cultivated  them,  built  walled  cities, 
organized  armies,  and  taken  all  possible  steps  to  protect  them- 
selves against  the  rugged  tribes  from  the  hills,  only  to  be 
over-run  and  finally  enslaved  by  these  hardy  hunters,  shep- 
herds and  fighters.  These  efforts  of  hill  tribes  to  secure  valley 
land  were  wars  for  economic  advantage. 

As  the  world  became  better  organized,  regular  commercial 
routes  developed,  and  the  commercial  ventures  along  these 
routes  proved  to  be  far  more  lucrative  than  the  cultivation  of 
the  soil.  The  Mediterranean,  for  example,  was  a great  trade- 
highway, and  it  was  for  this  reason  that  Corinth,  Carthage 
and  Rome  fought  for  its  possession  until  two  of  the  rivals 
were  destroyed,  and  only  Rome  remained. 

The  possession  of  the  trade  carried  with  it  the  banking, 
the  money-lending,  and  later  the  insurance,  hence,  for  cen- 
turies the  wars  were  trade  wars — between  Venice  and  Genoa; 
between  Holland  and  Spain;  between  Holland  and  England; 
between  England  and  the  United  States. 

With  the  industrial  revolution  and  the  advent  of  the  new 
system  of  economic  organization,  wars  were  fought  for  markets 
to  which  surplus  manufactured  products  could  be  sent;  for 
coal  and  iron  and  the  other  essential  resources;  for  “unde- 
veloped” (unexploited)  territory  in  Africa  and  Asia,  where 
investments  could  be  profitably  made.  This  epoch  is  well 
described  by  J.  A.  Hobson  (“Imperialism,”  New  York,  Pott, 
1902) ; by  H.  N.  Brailsford  (“The  War  of  Steel  and  Gold,” 
London,  Bell,  1914);  and  by  E.  D.  Morel  (“Truth  and  the 
War,”  London,  National  Labor  Press,  1916). 

15.  Financial  Imperialism — The  Super-Germ. 

Man’s  struggle  for  wealth  and  for  power  has  been  going 
on  through  the  ages.  The  latest  phase  of  that  struggle  is 
called  “financial  imperialism.” 

Financial  imperialism  is  the  super-germ  of  modern  wars, 
strong  peoples  rob  weak  peoples.  It  is  the  most  highly  de- 
veloped road  to  the  conquest  of  riches  and  of  power  that  the 
world  has  ever  known,  and  the  masters  of  modern  nations  are 
playing  the  imperial  game  with  a concentration  and  an  aggres- 
sive determination  that  would  put  a Roman  or  an  Egyptian 
imperialist  to  shame. 


25 


The  industrial  revolution  made  financial  imperialism  the 
inevitable  flower  of  an  economic  system  based  on  special  privi- 
lege and  organized  by  the  few  for  the  exploitation  of  the 
many.  The  Ancient  Regime  in  Europe  had  evolved  rent  as 
a method  by  which  the  owning  class  could  live  without  work- 
ing on  the  labor  of  the  producers.  The  developing  factory 
system  extended  this  possibility  from  the  land  to  the  machine. 
To  rent,  as  a source  of  unearned  (parasitic)  income,  industrial- 
ism, with  the  aid  of  the  corporation  added  profits,  interest  and 
dividends.  The  owning  class  was  no  longer  confined  to  the 
revenues  from  agricultural  land.  Mining,  railroading,  manu- 
facturing, public  utilities,  banking,  insurance — these  and  many 
more  of  the  industries  which  flourished  with  the  rising  indus- 
trial system  made  it  possible  for  the  owners  to  increase  the 
volume  and  to  diversify  the  sources  of  their  income.  Thus  the 
position  of  the  owning  class  became  more  secure  at  the  same 
time  that  their  total  income  was  increased. 

A man  working  on  the  land  with  hand  tools  can  produce 
barely  enough  to  keep  body  and  soul  together.  Supplement 
his  labor  by  that  of  an  ox  or  a horse,  and  his  capacity  to 
produce  is  increased.  Add  a tractor,  a seeder,  a reaper  and 
binder,  and  the  efficiency  of  his  labor  is  multiplied  many  fold. 
A good  man  with  a scythe  can  reap  an  acre  in  a day.  A 
reaper  and  binder  does  the  work  in  twenty  minutes.  Ma- 
chinery, driven  by  nature’s  energy,  gives  man  an  immensely 
increased  means  of  wealth  production. 

The  surplus  wealth  (unearned  income)  in  an  agricultural 
society  is  small.  An  industrial  community  has  far  more  sur- 
plus. Consequently  it  is  in  the  highly  organized  industrial 
districts  that  the  pressure  toward  imperialism  is  the  greatest. 

The  owner  of  industrial  properties  invests  his  surplus  in- 
side his  own  country  until  a point  is  reached  where  outside 
investments  pay  higher  returns.  Then  he  goes  to  that  foreign 
territory  which  offers  the  largest  and  the  surest  income.  The 
more  efficient  the  industrial  property  which  he  holds,  the 
greater  will  be  the  surplus  which  the  owner  has  to  invest. 

The  industrial  revolution  has  added  still  another  incentive 
to  aggression.  Under  an  agricultural  system,  to  conquer 
additional  territory  simply  meant  to  acquire  more  land  like 
that  already  held.  With  the  demands  of  modern  industry, 
however,  it  becomes  necessary  to  have  many  and  varied 
commodities  such  as  coal,  copper,  iron,  platinum,  rubber, 
cotton.  The  districts  in  which  these  commodities  exist,  or  in 
which  they  can  be  produced,  are  very  limited.  Consequently 


each  industrial  nation  strains  every  nerve  to  get  and  to  hold 
them.  The  industrial  revolution  has  resulted  in  an  intensified 
demand  for  certain  resources  whose  supply  is  extremely 
limited.  The  contention  for  these  resources  constitutes  one 
of  the  moving  forces  of  modern  society. 

Resources,  markets,  trade,  investment  opportunities — all  of 
these  forces  must  be  reckoned  with  in  any  estimate  of  the  in- 
tensity with  which  great  modern  empires  will  struggle  for 
supremacy. 

The  Great  War  was  fought  over  just  such  issues.  Take  for 
example,  a book  like  “The  Economic  War  in  our  Colonies,” 
by  Pradier  and  Besson,  with  a preface  by  M.  Paul  Deschanel, 
then  President  of  the  Chamber  of  Deputies.  (Paris,  Felix 
Alcan,  1916.)  The  work  is  devoted  to  the  economic  issues 
between  the  Central  Powers  and  France.  The  authors  show 
in  detail  how  the  Germans  and  Austrians  had  been  building 
up  their  trade  in  France  itself  as  well  as  in  the  French  colo- 
nies. Imports  into  the  French  colonies  from  Austria  and 
Germany  doubled  between  1907  and  1913,  while  exports  from 
the  French  colonies  into  Austria  and  Germany  trebled  during 
the  same  period.  “One  of  the  most  important  after  the  war 
problems  will  be  to  discover  how  to  paralyze  and  annihilate 
the  Austro-German  commerce,  not  only  in  the  Metropolis,  but 
also  in  our  colonies,”  the  authors  write  (p.  5).  The  book  con- 
tinues with  a vigorous  plea  to  the  French  Government  to  take 
any  and  every  means  to  destroy  the  commercial  power  of 
“the  enemy.” 

There  are  radical  writers  in  plenty,  such  as  Achille  Loria 
in  his  “Economic  Causes  of  War,”  F.  C.  Howe  in  his  “Why 
War?”  and  George  Kirkpatrick  in  his  “War — What  For?” 
who  point  out  the  imperial  germs  that  cause  modern  wars. 
But  they  are  not  alone.  The  Congressional  Record  for  Jan. 
7,  1901  (p.  637)  reports  Senator  Lodge  as  saying:  “If  anyone 
will  take  the  trouble  to  look  back  into  the  history  of  modern 
times,  since  the  great  economic  movements  began,  he  will  see 
how  many  of  the  wars  came  originally,  never  ostensibly,  but 
actually  from  economic  causes.”  And  Prof.  E.  R.  A.  Selig- 
man  (“Problems  of  Readjustment,”  New  York;  Appleton, 
1915,  p.  43)  observes:  “If  I read  history  aright,  the  forces 
that  are  chiefly  responsible  for  the  conflicts  of  political  groups 
are  the  economic  conditions  affecting  the  group  growth.” 
Perhaps  the  most  outspoken  statement  of  the  issue  came  from 
the  Navy  League,  and  was  carried  as  a preparedness  credo  by 
its  official  publication,  “The  Seven  Seas”: 

27 


" The  Navy  League  Believes i 

“That  most  modern  wars  arise  largely  from  commer- 
cial rivalries ; 

“That  we  are  now  seizing  the  trade  of  the  world; 

“That  following  the  present  war  will  come  the  most 
drastic  commercial  readjustments  and  the  most  dangerous 
commercial  rivalries  ever  known"; 

The  conclusion  of  course  was,  not  that  the  United  States 
should  stop  seizing  the  trade  of  the  world,  but  that  it  should 
have  a big  navy  in  order  to  protect  the  trade  after  it  was 
seized. 

Authorities  may  be  cited  endlessly,  but  to  what  purpose? 
Who  can  doubt  that  Mr.  Wilson  was  right  when  he  exclaimed, 
in  his  famous  St.  Louis  speech:  Of  course  this  was  a com- 
mercial war!  The  events  of  the  past  ten  years  have  torn  the 
mask  from  financial  imperialism,  so  that  it  stands  before  the 
world  today  as  the  method  by  which  strong  nations  rob  and 
exploit  weak  ones — peaceably,  where  the  weak  make  no  pro- 
test; by  force  of  arms  where  they  resist. 

Financial  imperialism  is  the  super  germ  of  modern  wars. 
Never  hitherto  has  the  amount  of  surplus  in  the  hands  of  the 
owning  class  been  so  vast.  Never  has  the  pressure  to  secure 
the  choice  spots  in  nature’s  garden  been  more  acute.  Empires 
are  pushed  toward  armaments  and  toward  wars  with  all  of  the 
power  that  lies  in  the  undeveloped  resources,  in  the  bitter 
contest  for  trade  and  for  markets,  and  in  billions  of  annual 
surplus,  demanding  safe  investment. 

16.  A Typical  Struggle. 

Oil  qualifies  as  a germ  of  war  under  any  possible  classifica- 
tion. The  struggle  for  oil  is  typical  of  the  conflicts  that  have 
been  occurring  during  the  past  half  century,  with  the  essen- 
tial resources  as  their  objectives.  Industries  are  organized 
within  the  political  boundaries  of  a country,  but  there  is  no 
country  that  contains  all  of  the  resources  necessary  for  its 
survival,  and  therefore  the  industries  of  each  must  reach  out- 
side of  the  country  for  the  missing  raw  materials.  In  the 
case  of  great  countries  like  Britain,  France  and  Germany  not 
only  oil,  but  copper,  rubber,  cotton,  hides,  fats,  wool  and 
numerous  other  essentials  must  be  imported. 

Inevitably,  so  long  as  country  struggles  against  country  for 
supremacy,  the  major  conflicts  of  the  world  will  be  over  the 
possession  of  essential  resources. 

28 


Here,  then,  is  the  germ  of  modern  wars.  The  great,  driv- 
ing, unceasing  pressure  for  the  control  of  economic  resources 
is  the  largest  single  fact  in  the  conflict  between  political 
groups,  and  unless  this  conflict  can  be  eliminated  or  modified, 
men  must  continue  in  the  future,  as  they  have  in  the  past  to 
slaughter  one  another  periodically  in  the  interest  of  economic 
advantage. 

17.  Making  the  World  a Living  Place. 

How  can  this  problem  be  met?  Here  is  the  germ  of  modern 
wars.  Can  it  be  destroyed?  One  or  two  conclusions  suggest 
themselves : 

1.  The  present  economic  system,  based  on  the  profit  motive 
and  organized  in  national  units  cannot  even  attempt  the  task. 

2.  There  is  only  one  sound  method  of  approach  to  the 
problem,  and  that  lies  through  a recognition  of  the  following 
facts : 

a.  The  people  of  the  world,  irrespective  of  race  or 
nationality,  have  two  common  objectives — to  go  on 
living  and  to  live  better. 

b.  The  resources  upon  which  better  living  depends — 
fertile  land,  coal,  water-power,  oil — are  not  the 
product  of  human  energy.  On  the  contrary,  they 
were  formed  irrespective  of  the  human  race. 

c.  These  resources  are  therefore  the  common  property 
of  those  who  inhabit  the  globe,  and  the  people  of 
the  United  States  have  no  more  claim  to  copper 
because  it  happens  to  be  in  Michigan  than  has  the 
Girard  Estate  to  anthracite  coal  because  it  happens 
to  own  the  lands  under  which  the  coal  lies. 

3.  The  resources  of  the  earth  must  therefore  be  used  to 
enable  the  people  of  the  earth  to  go  on  living  and  to  im- 
prove the  conditions  of  their  lives. 

18.  Oil  for  Those  Who  Need  It — a World  Solution. 

There  has  been  one  oil  war.  Suppose  there  is  a second  and 
a third  and  a fourth.  Suppose  that  in  the  course  of  these 
wars  one  great  nation  survives  the  struggle  and  secures  a 
monopoly  of  all  of  the  oil  resources  of  the  world.  This  nation 
will  be  in  a position  to  levy  a tax  on  every  human  being  who 
uses  oil  in  any  of  its  forms.  What  then?  Will  the  conqueror 
survive  his  conquest?  History  says:  No!  Will  the  payers  of 

29 


tribute  gain  in  happiness  ? Again,  the  answer  of  experience  is 
in  the  negative. 

In  the  last  analysis,  the  oil  reserves  of  the  world  differ  from 
the  oceans  in  only  one  essential  respect:  they  are  far  more 
limited  in  amount,  and  therefore  more  easily  monopolized. 
It  is  quite  possible,  however,  that  one  nation  might  become  so 
powerful  that  it  could  appropriate  the  seas,  and  tax  all  who 
wished  to  use  them.  The  sea-monopolist  would  then  be  in 
exactly  the  same  position  as  the  oil  monopolist — he  would  be 
able  to  live  without  labor  on  the  labor  of  some  of  his  fellow- 
men. 

That  is  no  solution  of  the  problem.  The  people  of  the  world 
need  oil.  How  are  they  to  get  it  on  an  equitable  basis? 

How  have  they  used  the  seas? 

The  seas  are  not  nationalized.  They  are  open  highways 
to  be  used  by  those  who  wish  to  carry  on  commercial  activities. 

Oil  is  not  national.  Baku  petroleum  has  not  changed  its 
character  since  the  Russian  Revolution,  any  more  than  the  oil 
of  Mexico  is  modified  by  being  transferred  from  Standard  Oil 
ownership  to  Mexican  Government  ownership. 

The  important  resources — oil,  coal,  iron,  copper,  water- 
power— are  a part  of  the  mother  earth  upon  which  lives  the 
human  race.  Humanity  is  dependent  for  its  existence  upon 
the  use  of  these  resources,  and  that  without  reference  to  race 
or  nationality.  Under  these  circumstances,  it  seems  inevitable 
that  some  plan  must  be  perfected  under  which  the  essential 
resources  go  to  those  who  need  them,  and  in  proportion  to 
the  need. 

The  revenues  of  the  United  States  Government  are  distri- 
buted among  the  various  government  departments  and  among 
the  different  sections  of  the  country  in  proportion  to  the 
needs  of  the  various  departments  or  sections,  just  as  the  coal 
and  iron-ore  of  the  United  States  Steel  Corporation  are 
divided  among  its  constituent  companies  in  proportion  to  their 
needs.  If  there  is  a shortage  in  either  case,  the  quotas  are 
scaled  down  until  the  total  available  supply  is  distributed 
among  the  applicants  for  it. 

Politically,  therefore,  the  question  resolves  itself  into  a dis- 
cussion as  to  how  an  authority  can  be  set  up,  which  will  be 
wide-spread  enough  to  have  jurisdiction  over  the  essential 
economic  advantages  and  resources  of  the  world,  and  which 
will,  at  the  same  time,  be  sufficiently  representative  so  that 
all  of  the  claimants  for  the  use  of  any  economic  advantage  or 
resource  shall  have  a voice  in  deciding  as  to  its  disposition. 

80 


Many  people  believe  that  the  League  of  Nations  will  pro- 
vide the  answer,  but  to  those  who  have  studied  the  origin  and 
development  of  the  modern  nation,  the  League  of  Nations 
seems  as  inadequate  to  meet  the  need  as  is  an  Indian  canoe  to 
transport  iron  ore  from  Duluth  to  Buffalo,  or  a prairie 
schooner  to  haul  farm  machinery  from  Illinois  to  Dakota. 
The  canoe  and  the  prairie  schooner  both  had  their  uses,  and 
in  their  day  they  were  wonderful  assets  in  the  struggle  of  the 
human  race  for  control  of  the  continent,  but  they  have  been 
superceded  by  the  steamboat  and  the  locomotive.  So  it  is  with 
the  modern  nation.  It  played  its  part  while  the  life  of  men 
was  isolated  and  local,  but  with  the  coming  of  world  life,  a 
league  of  nations  is  as  ineffective  as  a fleet  of  canoes  or  a 
convoy  of  prairie  schooners. 

The  economic  organization  of  the  world  must  be  undertaken 
by  those  who  are  immediately  concerned  with  the  economic 
activity — the  men  and  women  whose  energy  makes  the  wheels 
and  keeps  them  turning.  The  new  world  organization  must 
be  a producers’  organization,  built  along  the  lines  of  modern 
productive  activity. 

With  the  transport  workers,  the  construction  workers,  the 
miners,  the  agricultural  workers,  the  manufacturing  workers 
of  the  world  organized,  each  in  their  respective  occupational 
groups,  the  foundation  would  be  laid  for  a world  producers’ 
federation  that  could  handle  the  problems  of  resources  and 
raw  materials,  of  transport,  of  finance,  and  of  other  world 
economic  problems  in  a unified  and  scientific  manner. 

The  race  depends  today  on  the  engineer, — on  the  individual 
who  understands  how  to  make  nature’s  resources  into  things 
that  men  need.  By  sad  chance,  the  world  has  fallen  into  the 
hands  of  profiteers,  whose  aim  it  is  to  maintain  the  largest 
possible  margin  between  cost  and  selling  price.  The  profiteer 
(owner)  challenges  the  engineer  (worker).  The  profiteers’ 
goal  is  “grab  and  keep.”  The  engineer’s  goal  is  “produce  and 
distribute.”  It  is  the  slogan  of  the  engineer  on  which  the 
foundations  of  the  new  world  must  be  laid.  It  is  the  carrying 
out  of  this  slogan  on  a world  basis  that  will  make  war  un- 
necessary and  impossible. 


81 


The  Production  of  Crude  Petroleum 

(1860-1922)  in  the  five  countries  reporting 
at  least  ten  million  barrels  for  1922*  to- 
gether with  figures  for  total  world  produc- 


tion. 

Figures 

in  millions  of 

barrels. 

United 

States 

Mexico 

Russia 

Persia 

Dutch  E.  World 
Indies  Product’n 

1860 

0.5 

.... 

.... 

. . .. 

0.5 

1870 

5.3 

.... 

0.2 

.... 

. . .. 

5.8 

1880 

26.3 

. . .. 

3.0 

. . .. 

.... 

30.0 

1890 

45.8 

. . .. 

28.7 

.... 

.... 

76.6 

1900 

63.6 

.... 

75.8 

.... 

2.3 

149.1 

1905 

134.7 

0.3 

54.9 

.... 

7.8 

215.3 

1910 

209.6 

3.3 

70.3 

. . .. 

11.0 

327.6 

1911 

220.4 

14.1 

66.2 

.... 

12.1 

345.7 

1912 

222.9 

16.6 

86.0 

. . .. 

10.8 

352.5 

1913 

248.4 

25.9 

62.8 

.... 

11.9 

384.6 

1914 

265.8 

21.2 

67.0 

.... 

12.7 

399.3 

1915 

281.1 

32.9 

68.5 

.... 

12.4 

426.4 

1916 

300.8 

39.8 

72.8 

.... 

13.2 

459.4 

1917 

335.3 

55.3 

69.0 

6.9 

12.9 

506.4 

1918 

355.9 

63.8 

40.5 

7.2 

13.3 

515.5 

1919 

377.4 

87.1 

34.3 

6.4 

15.7 

558.6 

1920 

443.4 

163.5 

25.0 

12.4 

17.5 

694.8 

1921 

469.6 

195.0 

28.5 

16.7 

18.0 

759.0 

1922 

551.2 

185.1 

35.1 

21.2 

.... 

851.5 

Figures  from  “The  Mineral  Industry”  1920.  G.  A.  Roust* 
pp.  506-507.  “Oil  Trade  Journal*”  April*  1923*  p.  98. 


32 


Books  on  “Oil  and  the  Germs  of  War/’ 

Many  readers  will  want  to  look  more  deeply  into  the  ques- 
tions touched  upon  in  the  preceding  pages.  Here  are  some 
suggestions : 


I.  Books  on  the  Struggle  for  Oil 


X.  “Oil — Its  Influence  on  Poli- 
tics.” Frances  Delaisi.  Tr. 
by  C.  Leonard  Leese.  Lon- 
don, Labour  Pub.  €6.,  1922. 

2.  “The  Economics  of  Petro- 
leum.” Jos.  E.  Pogue.  New 
York,  Wiley,  1921. 

8.  “Report  of  the  Federal  Trade 
Commission  on  Foreign 
Ownership  in  the  Petroleum 
Industry.”  Feb.  12,  1923. 


4.  “Oil  Conquest  of  the  World.” 
F,  A.  Talbot.  London, 
Heinemann,  1914. 

5.  “Fuel  Oil  in  Industry.”  S. 

O.  Andros.  Chicago,  Shaw, 
1920. 

6.  “Geology  of  Petroleum.”  W. 
H.  Emmons.  New  York, 
McGraw-Hill,  1921. 


11.  Books  on  the  Causes  of  War 


3.  “Coal,  Iron  and  War.”  E. 
C.  Eckel.  New  York,  Holt, 
1920. 

4.  “Why  Wars  Come.”  Rear- 
Admiral  A.  P.  Niblack.  Bos- 
ton, Stafford  Co.,  1922. 

5.  “The  Economic  Causes  of 
War.”  Achille  Loria.  Chi- 
cago, Kerr,  1918. 


111.  Books  that  Suggest  a Way  Out 

1.  “Organization  for  Work.”  H.  4.  “Proposed  Roads  to  Free- 
L.  Gantt.  New  York,  Har-  dom.”  Bertrand  Russell, 

court,  1919.  New  York,  Holt,  1919. 


1.  “The  Economic  Causes  of 
Modern  War.”  John  Bake- 
less. New  York,  Moffat, 

Yard,  1921. 

, * 

2.  “The  Fruits  of  Victory.” 
Norman  Angell.  Glasgow, 
Collins,  1921. 


2.  “The  Engineers  and  the  Price 
System.”  Thorstein  Veblen. 
New  York,  Huebsch,  1921. 

3.  “The  Next  Step.”  Scott 
Nearing.  Ridgewood,  N.  J., 
Nellie  S.  Nearing,  1922. 


J.  “Self-Government  in  Indus- 
try.” G.  D.  H.  Cole.  Lon- 
don, Bell,  1918. 

6.  “The  Frontier  of  Control.” 
C.  L.  Goodrich.  New  York, 
Harcourt,  1920. 


ELP  BROADCAST  THESE  IDEAS 


THE  AMERICAN  EMPIRE” 


“THE  NEXT  STEP” 


Tells  why  and  ho, w.  the  American  ruling  cla 
has  come  into  power;  . 1 

Discusses  the  Great  War,  and  the  gains  made 
by  the  American  Plutocracy  because  of  it; 
Gives  in  careful  detail  the  partition  of  the 
Earth  under  the  Peace  Treaty;  the  doctrine  of 
Pan- American  ism ; the  figures  of  the  wealth 
and  economic  portion  of  the  United  States  as 
compared  with  the  other  great  empires  of  the 
world,  and 

States  the  program  for  world  conquest  that ' 
been  formulated  by  the  American  ruling  class. 


Offers  a constructive,  dynamic,  far-reaching 
plan  for  an  economic  world  federation  which 
aims  not  only  to  eliminate  war  but  to  enlarge 
the  opportunity  for  human  well-being. 

Five  chapters  on  “World  Economic  Organisa- 
tion” point  out  the  causes  that  have  led  to  the 
present  economic  muddle,  explain  how  eco- 
nomic society  is  built,  present #a  plan  for  or- 
ganizing each  of  the  main  divisions  of  industry 
on  a world-basis,  describe  the  economic  world 
state  that  will  be  created  by  the  federations 
of  these  divisions,  and  tell  what  the  world 
producers’  federatiojn  would  do  to  stabilize  and 
direct  the  economic  activities  of  mankind. 


Iw 


Through  a special  arrangement  these  hooks  are  sold  at 
dollar  in  cloth  and  fifty  cents  in  paper  covers,  postpaid. 

Have  you  a friend  that  you  would  like  to  enlighten?  Send  one 
dollai,  and  a copy  of  each  of  these  hooks  in  paper  covers,  together 
with  a copy  of  “Oil  and  the  Germs  of  War”  will  be  sent  postpaid 
to  any  address  in  the  United  States,  Canada  or  Great  Britain. 


NELLIE  SEEDS  NEARING,  Publisher, 
Ridgewood,  N.  J. 


*53  ST  4- 

Tur  v.  i.  ‘ 

* rto.4} 

ONE  BIG  UNION 
OF  BUSINESS 


By 

SCOTT  NEARING 


NEW  YORK 

RAND  SCHOOL  OF  SOCIAL  SCIENCE 


The  only  book  of  its  kind  in  America 


THE 

American  Labor 

YEAR  BOOK 

19  19  - 1920 

VOLUME  III 

Edited  by 

ALEXANDER  TRACHTENBERG 

Director , Department  of  Labor  Research 
Rand  School  of  Social  Science 

A reference  book  of  484  pages  of  material  deal- 
ing with  the  progress  of  the  Socialist,  Labor 
and  Cooperative  movements  in  this  country  and 
abroad,  and  including  a series  of  articles  on  so- 
cial and  economic  topics  by  prominent  authorities. 


Price,  Cloth,  $2.00 

Add  10c  to  cover  postage 

ORDER  FROM 
RAND  BOOK  STORE 
7 EAST  15th  STREET,  NEW  YORK,  N.  Y. 


cIhe 

ONE  BIG  UNION 
OF  BUSINESS 


By  SCOTT  NEARING 


Author  of 

“POVERTY  AND  RICHES”;  “INCOME”;  “FINANCING 
THE  WAGE-EARNER'S  FAMILY”;  “WAGES  IN  THE 
UNITED  STATES”;  “ANTHRACITE”;  ETC.,  ETC. 


Copyright  1920 

RAND  SCHOOL  OF  SOCIAL  SCIENCE 
7 East  15th  Street 
NEW  YORK  CITY,  N.  Y. 


f f '2/(As*stf  /^f^r 


TABLE  OF  CONTENTS 


PAGE 

1.  Every  Man  for  Himself 5 

2.  The  Struggle  for  Organization 9 

3.  Capitalist  against  Capitalist 11 

4.  The  Investment  Banker 15 

5.  The  Cohesion  of  Wealth 18 

6.  Land  Ownership  and  Liberty 20 

7.  Security  of  “Acquisitions” 22 

8.  Safeguarding  Property  Rights 24 

9.  Plutocracy  29 

10.  Bankers  of  the  World  Unite!... 31 


% 


THE  ONE  BIG  UNION 
OF  BUSINESS 


I.  EVERY  MAN  FOR  HIMSELF 

The  development  of  American  industry,  during  the  hun- 
dred years  that  began  the  War  of  1812,  led  inevitably  to 
the  unification  of  business  control  in  the  hands  of  a small 
group  of  wealth  owners. 

“Every  man  for  himself”  was  the  principle  that  the  theo- 
rists of  the  eighteenth  century  bequeathed  to  the  industrial 
pioneers  of  the  nineteenth.  The  philosophy  of  individual- 
ism fitted  well  with  the  temperament  and  experience  of  the 
English  speaking  peoples ; the  practice  of  individualism  un- 
der the  formula  “Every  man  for  himself”  seemed  a divine 
ordination  for  the  benefit  of  the  new  industry. 

The  eager  American  population  adopted  the  slogan  with 
enthusiasm.  “Every  man  for  himself”  was  the  essence  of 
their  frontier  lives;  it  was  the  breath  of  the  wilderness. 

But  the  idea  failed  in  practice.  Despite  the  assurances 
of  its  champions  that  individualism  was  necessary  to  pre- 
serve initiative  and  that  progress  was  impossible  without 
it,  like  many  another  principle — fine  sounding  in  theory — 
it  broke  down  in  the  application,  and  was  at  length  aban- 
doned by  its  staunchest  advocates. 

The  first  struggle  that  confronted  the  ambitious  con- 
queror of  the  new  world  was  the  struggle  with  nature.  Her 
stores  were  abundant,  but  they  must  be  prepared  for  human 

5 


use.  Timber  must  be  sawed;  soil  tilled;  fish  caught;  coal 
mined ; iron  smelted ; gold  extracted.  Rivers  must  be 
bridged;  mountains  spanned;  lines  of  communication  main- 
tained. The  continent  was  a vast  storehouse  of  riches — 
potential  riches.  Before  they  could  be  made  of  actual  use, 
the  hand  of  man  must  transform  them  and  transport  them. 

These  necessary  industrial  processes  were  impossible  un- 
der the  “Every  man  for  himself”  formula.  Here  was  a 
vast  continent,  with  boundless  opportunities  for  supplying 
the  necessaries  and  comforts  of  life — provided  men  were 
willing  to  come  together;  divide  up  the  work;  specialize; 
and  exchange  products. 

Co-operation — alone — could  conquer  nature.  The  basis 
of  this  co-operation  proved  to  be  the  machine.  Its  means 
was  the  system  of  production  and  transportation  built  upon 
the  use  of  steam,  electricity,  gas,  and  labor  saving  appli- 
ances. 

When  the  United  States  was  discovered,  the  shuttle  was 
thrown  by  hand ; the  hammer  was  wielded  by  human-arms ; 
the  millstones  were  turned  by  wind  and  water ; the  boxes 
and  bales  were  carried  by  pack-animals  or  in  sailing  vessels 
— these  processes  of  production  and  transportation  were 
conducted  in  practically  the  same  way  as  in  the  time  of 
Pharaoh  or  of  Alexander  the  Great.  A series  of  discoveries 
and  inventions,  made  in  England  between  1735  and  1784  sub- 
stituted the  machine  for  the  tool ; the  power  of  steam  for 
the  power  of  wind,  water  or  human  muscle ; and  set  up 
the  factory  to  produce  and  the  railroad  and  the  steamboat 
to  transport  the  factory  product. 

American  industry,  up  to  1812,  was  still  conducted  on  the 
old,  individualistic  lines.  Factories  were  little  known.  Men 
worked  singly,  or  by  twos  and  threes  in  sheds  or  work- 
rooms adjoining  their  homes.  The  people  lived  in  small 
villages  or  on  scattered  farms.  Within  the  century,  Amer- 
ican industry  was  transformed.  Production  shifted  to  the 
factory;  about  the  factory  grew  up  the  industrial  city  in 
which  lived  the  tens  or  hundreds  of  thousands  of  factory 
workers  and  their  families. 

The  machine  made  a new  society.  The  artisan  could  not 
compete  with  the  products  of  the  machine.  The  home  work- 

6 


shop  disappeared,  and  in  its  place  rose  the  factory,  with 
its  tens,  its  hundreds  and  its  thousands  of  operatives.* 

Under  the  modern  system  of  machine  production,  each 
person  has  his  particular  duty  to  perform.  Each  depends, 
for  the  success  of  his  service,  upon  that  performed  by  thou- 
sands of  others. 

All  modern  industry  is  organized  on  the  principle  of  co- 
operation; division  of  labor,  and  specialization.  Each  has 
his  task,  and  unless  each  task  is  performed  the  entire  sys- 
tem breaks  down. 

Never  were  the  various  branches  of  a military  organiza- 
tion more  completely  dependent  upon  one  another  than  are 
the  various  departments  of  modern  economic  life.  Take  a 
simple  product  like  a wire  nail,  purchased  in  a hardware 
store  in  Omaha.  How  did  the  nail  get  there?  Originally, 
in  the  form  of  iron  ore,  it  lay  in  a Lake  Superior  ore  bed. 
The  ore  was  shoveled  onto  cars;  transported  to  the  Lake; 
dumped  into  an  ore  steamer ; taken  down  to  Lake  Erie ; un- 
loaded again  into  cars;  pulled  to  Pittsburg;  dumped  into  a 
blast  furnace;  converted  into  steel;  drawn  out  into  wire; 
run  through  the  nail  mill ; packed ; shipped  to  an  Omaha 
jobber,  and  sold  by  him  to  the  dealer.  At  each  one  of  the 
stages  in  this  economic  progress,  machines  and  tools  were 
used  that  had  been  made,  like  the  nail,  by  many  processes 
and  many  journeyings.  Likewise  at  each  stage,  and  be- 
tween each  stage,  are  men  and  women,  engaged  in  the  one 
task  of  working  an  ore  shovel;  or  cleaning  and  oiling 
switches ; or  firing  a boiler,  or  doing  some  other  unit  job 
that  takes  all  of  the  time  and  thought  of  the  worker.  Each 
of  these  men  and  women  must  be  fed,  clothed  and  housed. 
Since  they  are  devoting  all  of  their  time  to  nail  making, 


* The  Census  of  Manufactures  for  1914  reports  275,791  manufac- 
turing establishments  in  the  United  States.  Two-thirds  of  these 
establishments  employed  five  wage-earners,  or  less,  but  scarcely 
one-seventh  of  the  total  number  of  wage-earners  were  employed  in 
them.  Two-thirds  of  the  wage-earners  worked  in  establishments 
employing  more  than  100  persons;  one-third  worked  in  establish- 
ments employing  more  than  500  persons.  There  were  648  establish- 
ments in  the  country  employing  over  1,000  wage-earners,  and  the 
total  number  employed  by  them  was  1,255,259,  or  one-sixth  of  all 
of  the  wage-earners  in  manufacturing  industry. 

7 


they  cannot  make  food  nor  clothes  nor  houses.  It  follows 
that  other  men  and  women,  who  want  nails,  must  give  their 
time  to  the  preparation  of  food,  the  manufacture  of  clothes 
and  the  building  of  houses.  The  work  of  the  modern  world 
is  done  in  certain  main  industries — agriculture,  manufactur- 
ing, transportation  and  the  like.  Each  one  of  these  indus- 
tries is  divided  into  branches  such  as  steel  manufacturing, 
shoe  manufacturing,  textile  manufacturing,  furniture  manu- 
facturing. Taken  together  these  industries  make  up  the 
economic  structure  that  feeds,  clothes,  houses  and  provides 
for  the  people.  In  this  great  economic  society  no  man  works 
alone. 

All  are  associated  more  or  less  intimately  with  the  activ- 
ities of  thousands  and  millions  of  their  fellows,  until  the 
failure  of  one  is  the  failure  of  all,  and  the  success  of  one 
is  the  success  of  all. 

Such  a development  could  have  only  one  result — people 
who  worked  together  must  live  together.  Scattered  villages 
gave  place  to  industrial  towns  and  cities.  People  were  com- 
pelled to  co-operate  in  their  lives  as  well  as  in  their  labor.* 

The  theory  under  which  the  new  industrial  society  began 
its  operations  was,  “Every  man  for  himself.”  The  develop- 
ment of  the  system  has  made  every  man  dependent  upon 
his  fellows.  The  principle  demanded  an  extreme  individu- 
alism. The  practice  has  created  a vast  net-work  of  inter- 
relations, that  leads  the  cotton  spinner  of  Massachusetts  to 
eat  the  meat  prepared  by  the  packing-house  operative  in 
Omaha,  while  the  pottery  of  Trenton  and  the  clothing  of 
New  York  are  sent  to  the  Yukon  in  exchange  for  fish  and 
to  the  Golden  Gate  for  fruit.  Inside  as  well  as  outside  the 
nation,  the  world  is  united  by  the  strong  bonds  of  economic 
necessity.  None  can  live  to  himself,  alone.  Each  depends 
upon  the  labor  of  myriads  whom  he  has  never  seen  and  of 


* By  1910  the  percentage  of  people  living  in  cities  was,  for  the 
whole  country,  46.3  per  cent.  For  Massachusetts,  it  was  92.8  per 
cent;  for  Rhode  Island,  96.7  per  cent;  for  New  York,  78.8  per 
cent;  for  Ohio,  55.9  per  cent;  for  Illinois,  61.7  per  cent. 

The  Census  of  Manufactures  for  1914  shows  only  one-tenth  of 
the  value  of  manufactured  products  produced  in  cities  of  10,000  to 
25,000,  while  two-fifths  was  produced  in  cities  with  a population 
of  100,000  or  over. 


8 


whom  he  has  never  heard.  Whether  we  will  or  no,  they 
are  his  brothers-in-labor — united  in  the  Atlas  fellowship  of 
those  who  carry  the  world  upon  their  shoulders. 

The  theory  of  “Every  man  for  himself”  failed.  The 
practical  exigencies  involved  in  subjugating  a continent  and 
in  wresting  from  nature  the  means  of  livelihood  made  it 
necessary  to  introduce  the  opposite  principle — “In  union 
there  is  strength;  co-operation  achieves  all  things.” 

II.  THE  STRUGGLE  FOR  ORGANIZATION 

The  technical  difficulties  involved  in  the  mechanical  pro- 
duction of  wealth  compelled  the  strongest  individualists  to 
work  together.  The  requirements  of  industrial  organiza- 
tion drove  them  in  the  same  direction. 

The  first  great  problem  before  the  early  Americans  was 
the  conquest  of  nature.  To  this  problem  the  machine  was 
the  answer.  The  second  problem  was  the  building  of  an 
organization  capable  of  handling  the  new  mechanism  of  pro- 
duction— an  organization  large  enough,  elastic  enough,  sta- 
ble enough  and  durable  enough — to  this  problem  the  cor- 
poration was  the  answer. 

The  machine  produced  the  goods.  The  corporation  di- 
rected the  production,  marketed  the  products  and  financed 
both  operations. 

The  corporation,  as  a means  of  organizing  and  directing 
business  enterprise,  is  a product  of  the  last  hundred  years. 
A century  ago  the  business  of  the  United  States  was  car- 
ried on  by  individuals,  partnerships,  and  a very  few  joint 
stock  companies.  At  the  time  of  the  last  census  more  than 
four-fifths  of  the  manufactured  products  were  turned  out 
under  corporate  direction ; most  of  the  important  mining 
enterprises  were  corporate,  and  the  railroads,  public  util- 
ities, banks  and  insurance  companies  were  virtually  all  un- 
der the  corporate  form  of  organization.  Thus  the  passage 
of  a century  has  witnessed  a complete  revolution  in  the 
form  of  organizing  and  directing  business  enterprise. 

The  corporation,  as  a form  of  business  organization,  is 
immensely  superior  to  individual  management  and  the  part- 
nership. 


9 


1.  The  corporation  is  permanent.  In  the  eyes  of  the  law 
it  is  a person  that  lives  as  long  as  the  charter  is  granted. 
Thus  the  corporation  has  a perpetual  life.  Individuals  die ; 
partnerships  are  dissolved ; but  the  corporation,  with  its 
unbroken  existence,  possesses  a continuity  and  a perma- 
nence that  are  impossible  of  attainment  under  the  earlier 
forms  of  business  organization. 

2.  Liability,  under  the  corporation,  is  limited  by  the 
amount  of  the  investment.  The  liability  of  an  individual  or 
a partner  engaged  in  business  was  as  great  as  his  ability 
to  pay.  The  investor  in  a corporation  cannot  lose  a sum 
larger  than  that  represented  by  his  investment. 

3.  The  corporation,  through  the  issuing  of  stocks  and 
bonds,  makes  it  possible  to  subdivide  the  total  amount  in- 
vested in  one  enterprise  into  many  small  units.*  These 
chances  for  small  investment  mean  that  a large  number  of 
persons  may  join  in  subscribing  the  capital  for  a business 
enterprise.  They  also  mean  that  one  well-to-do  person  may 
invest  his  wealth  in  a score  or  a hundred  enterprises,  thus 
reducing  the  risk  of  heavy  losses  to  a minimum. 

4.  The  corporation  is  not,  as  were  the  earlier  forms  of 
organization,  necessarily  a “one  man”  concern.  Many  cor- 
porations have  upon  their  boards  of  directors  the  leading 
business  men,  merchants,  bankers  and  financiers.  In  this 
way  the  investing  public  has  the  assurance  that  the  enter- 
prise will  be  conducted  along  business  lines,  while  the  busi- 
ness men  on  the  board  have  an  opportunity  to  get  in  on 
the  “ground  floor.” 

The  corporation  has  a permanence,  a stability,  and  a 
breadth  of  financial  support  that  are  quite  impossible  in 
the  case  of  the  private  venture  or  of  the  partnership.  It 
does  for  business  organization  what  the  machine  did  for 
production. 

The  corporation  came  into  favor  at  a time  when  busi- 
ness was  expanding  rapidly.  Surplus  was  growing.  Wealth 

?!  T1  WWW 

* The  169  largest  railroads  in  the  United  States  have  issued 
84,418,796  shares  of  stock.  (American  Labor  Year  Book  1917-18, 
p.  169.)  Theoretically,  therefore,  there  might  be  eighty-four  mil- 
lions of  owners  of  the  American  railroads. 

10 


and  capital  were  accumulating.  Industrial  units  were  in- 
creasing in  size.  It  was  necessary  to  find  some  means  by 
which  the  surplus  wealth  in  the  hands  of  many  individuals 
could  be  brought  together ; large  sums  of  capital  concen- 
trated under  one  unified  control;  the  investments,  thus  se- 
cured, safeguarded  against  untoward  losses,  and  the  busi- 
ness conservatively  and  efficiently  directed.  The  corpora- 
tion was  the  answer  to  these  needs. 

“United  we  stand”  proved  to  be  as  true  of  organizers  and 
investors  as  it  was  of  producers.  The  corporation  was  the 
common  denominator  of  people  with  various  industrial  and 
financial  interests. 

Like  every  other  social  mechanism  that  attempts  to  work 
on  a large  scale,  business  has  been  forced  to  institution- 
alize itself.  The  corporation  is  the  means  by  which  this 
process  has  been  carried  forward. 

The  corporation  played  another  role  of  vital  consequence. 
It  enabled  the  banker  to  dominate  the  business  world. 
Heretofore,  the  banker  had  dealt  largely  with  exchange. 
The  industrial  leader  was  his  equal  if  not  his  superior.  The 
organization  of  the  corporation  put  the  supreme  power  in 
the  hands  of  the  banker,  who  as  the  intermediary  between 
investor  and  producer,  held  the  purse  strings. 


III.  CAPITALIST  AGAINST  CAPITALIST 

c 

The  early  American  enterprisers — the  pioneers — began  a 
single-handed  struggle  with  nature.  Necessity  forced  them 
to  co-operate.  They  established  a new  industry.  The  fac- 
tory brought  them  together.  They  organized  their  system 
of  industrial  direction  and  control.  The  corporation  united 
them.  They  turned  on  one  another  in  mortal  combat,  and 
the  frightfulness  of  their  losses  forced  them  to  join  hands. 

The  business  men  of  the  late  nineteenth  century  had  been 
nurtured  upon  the  idea  of  competition.  “Every  man  for 
himself  and  the  devil  take  the  hindermost”  summed  up  their 
philosophy.  Each  person  who  entered  the  business  arena 
was  met  by  an  array  of  savage  competitors  whose  motto 

11 


was  “Victory  or  Death.”  In  the  struggle  that  followed, 
most  of  them  suffered  death. 

Capitalist  set  himself  up  against  capitalist  in  bitter  strife. 
The  railroads  gouged  the  farmers,  the  manufacturers  and 
the  merchants  and  fought  one  another.  The  big  business 
organizations  drove  the  little  man  to  the  wall  and  then  at- 
tacked their  larger  rivals.  It  was  a fight  to  the  finish  with 
no  quarter  asked  or  given. 

“The  finish”  came  with  periodic  regularity  in  the  seven- 
ties, the  eighties  and  the  nineties.  The  number  of  com- 
mercial failures  in  1875  was  double  the  number  of  1872. 
The  number  of  failures  in  1878  was  over  three  times  that 
of  1871.  The  same  thing  happened  in  the  eighties.  The 
liabilities  of  concerns  failing  in  1884  were  nearly  four  times 
the  liabilities  of  those  failing  in  1880.  The  climax  came  in 
the  nineties,  after  a period  of  comparative  prosperity.  Hard 
times  began  in  1893.  Demand  dropped  off.  Production 
decreased.  Unemployment  was  wide-spread.  Wages  fell 
Prices  went  down,  down,  under  bitter  competitive  selling, 
to  touch  rock  bottom  in  1896.  Business  concerns  continued 
to  fight  one  another,  though  both  were  going  to  the  wall. 
Weakened  by  the  struggle,  unable  to  meet  the  competitive 
price  cutting  that  was  all  but  the  universal  business  practice 
of  the  time,  thousands  of  business  houses  closed  their  doors. 
The  effect  was  cumulative;  the  fabric  of  credit,  broken  at 
one  point  was  weakened  correspondingly  in  other  places 
and  the  guilty  and  the  innocent  alike  plunged  into  the  morass 
of  bankruptcy. 

The  destruction  wrought  in  the  business  world  by  the 
panic  of  1893  was  enormous.  During  the  years  immediately 
preceding  1893  the  number  of  commercial  failures  in  the 
United  States  was  about  ten  thousand  a year.  In  1893  the 
number  jumped  to  15,242.  The  amount  of  liabilities  in- 
volved in  these  failures  had  not  passed  the  two  hundred 
million  mark  since  1884.  The  total  liabilities  of  failed  con- 
cerns in  1893  was  $346,780,000.  During  the  next  two  years 
it  ran  over  one  hundred  and  seventy  millions  each  year.  In 
1896  it  jumped  to  $226,000,000.  (Statistical  Abstract,  1917, 
p.  759).  Normal  conditions  were  not  restored  until  1899, 
when  the  boom  that  accompanied  the  Spanish  War  put  busi- 
ness again  on  its  feet. 


12 


The  catastrophe  of  the  nineties  coming  as  it  did  so  close 
upon  the  heels  of  the  panics  that  had  immediately  preceded 
it,  could  not  fail  to  teach  its  lesson.  Competition  was  not 
the  life,  but  the  death  of  trade.  “Every  man  for  himself” 
as  a policy  applied  to  the  business  world,  led  most  of  those 
engaged  in  the  struggle  over  the  brink  of  destruction.  There 
was  but  one  way  out — through  united  action. 

The  period  between  1897  and  1902  was  one  of  feverish 
activity  directed  to  co-ordinating  the  affairs  of  the  business 
world.  Trusts  were  formed  in  all  of  the  important  branches 
of  industry  and  trade.  The  public  looked  upon  the  trust 
as  a means  of  picking  pockets  through  trade  conspiracies 
and  the  boosting  of  prices.  The  Sherman  Anti-Trust  Law 
had  been  passed  on  that  assumption.  In  reality  the  trusts 
were  organized  by  far  seeing  men  who  realized  that  com- 
petition was  wasteful  in  practice  and  unsound  in  theory. 
The  idea  that  the  failure  of  one  bank  or  shoe  factory  was  of 
advantage  to  other  banks  and  shoe  factories,  had  not  stood 
the  test  of  experience.  The  tragedies  of  the  nineties  had 
showed  conclusively  that  an  injury  to  one  part  of  the  com- 
mercial fabric  was  an  injury  to  all  of  its  parts. 

There  were  other  reasons,  of  course,  for  the  formation 
of  the  trusts,  but  the  rapid  move  away  from  competition 
and  toward  combination,  was  made  by  men  whose  experi- 
ence had  taught  them  the  wastefulness  of  competition. 

The  generation  of  business  men  trained  since  1900  has 
had  no  illusions  about  competition.  Rather,  it  has  had 
as  its  object  the  successful  combination  of  various  forms 
of  business  enterprise  into  ever  larger  units.  First  there 
was  the  uniting  of  like  industries — cotton  mills  were  linked 
with  cotton  mills;  mines  with  mines.  Then  came  the  in- 
tegration of  industry — the  concentration  under  one  con- 
trol of  all  of  the  steps  in  the  industrial  process  from  the 
raw  material  to  the  finished  product — iron  mines,  coal  mines, 
blast  furnaces,  converters,  and  rail  mills  united  in  one  or- 
ganization to  take  the  raw  material  from  the  ground  and 
to  turn  out  the  finished  steel  product.  Last  of  all  there  was 
the  union  of  unlike  industries — the  control,  by  one  group 
of  interests  of  as  many  and  as  varied  activities  as  could 
be  brought  together  and  operated  at  a profit.  The  lengths 

13 


to  which  business  men  have  gone  in  combining  various  in- 
dustries is  well  shown  by  the  recent  investigation  of  the 
meat  packing  industry.  In  the  course  of  that  investigation, 
the  Federal  Trade  Commission  was  able  to  show  that  the 
five  great  packers  (Wilson,  Armour,  Swift,  Morris  and 
Cudahy)  were  directly  affiliated  with  108  business  enter- 
prises, including  12  rendering  companies ; 18  stockyard  com- 
panies; 8 terminal  railway  companies;  9 manufacturers  of 
packers’  machinery  and  supplies ; 6 cattle  loan  companies ; 4 
public  service  corporations ; 18  banks,  and  a number  of 
miscellaneous  companies,  and  that  they  controlled  2,000 
food  products  not  immediately  related  to  the  packing  in- 
dustry.* 

It  was  in  the  consummation  of  these  combinations,  in- 
tegrations and  consolidations  that  the  investment  banker 
came  into  his  own  as  the  key-stone  in  the  modern  indus- 
trial arch. 

Business  is  consolidated  because  consolidation  pays — not 
primarily,  through  the  increase  of  prices,  but  through  the 
greater  stability,  the  lessened  costs,  and  the  growing  secur- 
ity that  has  accompanied  the  abolition  of  competition. 

Again  the  forces  of  social  organization  have  triumphed 
in  the  face  of  an  almost  universal  opposition.  American 
business  men  practiced  competition  until  they  found  that 
co-operation  was  the  only  possible  means  of  conducting 
large  affairs.  The  business  experiences  of  the  past  fifty 
years  have  added  another  to  the  many  causes  that  were 
forcing  the  business  individualist  to  unite  with  his  fellows. 
Theory  advised,  “Compete !”  Experienced  warned,  “Com- 
bine !”  Business  men — like  all  other  practical  people — ac- 
cepted the  dictates  of  experience  as  the  only  sound  basis  for 
procedure.  They  combined  because  their  competitive  strug- 
gles had  pointed  out  to  them  the  direction  in  which  lay 
their  common  salvation.  Their  combination  solidified  their 
ranks,  preparing  them  to  take  their  places  in  a closely  knit, 
dominant  class,  with  clearly  marked  interests,  and  a strong 
feeling  of  class  consciousness  and  solidarity. 


* Summary  of  the  Report  of  the  Federal  Trade  Commission  on 
the  Meat  Packing  Industry,  July  3,  1918,  Wash.  Govt.  Print.  1918. 

14 


IV.  THE  INVESTMENT  BANKER 


The  investment  banker  is  the  directing  and  co-ordinating 
force  in  the  modern  business  world.  The  manufacturer 
who  wishes  to  enlarge  his  factory  borrows,  from  the  banker, 
the  necessary  capital  for  the  enterprise.  The  merchant 
buys  a bill  of  goods,  pays  them,  and  then  from  the  banker 
borrows  money  on  the  goods  and  is  thus  able  to  enlarge 
his  business.  The  corporation,  desiring  to  launch  a new 
venture,  issues  stocks  and  bonds.  These  are  taken  by  the 
banker  and  sold  to  investors.  Each  dollar  deposited  in  a 
bank  makes  that  bank  a dollar  stronger — gives  the  banker 
a chance  to  make  money  by  lending  the  dollar  at  a higher 
rate  of  interest  than  he  pays  the  depositor.  Those  who 
wish  to  borrow  money  and  those  who  have  money  to  in- 
vest go  to  the  banker.  He  holds  the  purse  strings — the 
crown  and  scepter  of  economic  power. 

Every  city  and  town  has  its  bank.  There  are  almost 
30,000  banks  in  the  United  States.  Under  the  present  law, 
most  of  these  banks  are  held  together  in  the  Federal  Re- 
serve System  with  its  twelve  regional  banks  located  in 
twelve  of  the  leading  business  centers. 

The  necessities  of  factory  production  demanding  great 
outlays  of  capital;  the  immense  financial  necessities  of  cor- 
porations ; the  consolidation  of  business  ventures  on  a huge 
scale;  the  broadened  use  of  corporate  securities  as  invest- 
ments— all  brought  the  investment  banker  into  the  fore- 
ground. During  the  last  generation  the  great  executives 
and  enterprisers  went  into  the  field  of  production — building 
factories,  constructing  railroads,  uniting  industries.  The 
“born  generals”  of  the  present  generation  are  devoting 
themselves  to  the  problems  of  finance,  because  it  is  with 
financial  cords  that  the  structure  of  the  modern  business 
world  is  bound  together. 

Before  the  Spanish  War,  the  investment  banker  financed 
the  trusts.  After  the  war  he  was  entrusted  with  the  vast 
surpluses  which  the  concentration  of  business  control  had 
placed  in  a few  hands.  Business  consolidation  had  given 
the  banker  position.  The  control  of  the  surplus  brought 
him  power.  Henceforth,  all  who  wished  access  to  the 

15 


world  of  great  industrial  and  commercial  affairs  must  knock 
at  his  door. 

This  concentration  of  economic  control  in  the  hands  of 
a relatively  small  number  of  investment  bankers  has  been 
referred  to  frequently  as  the  “Money  Trust.” 

Investment  banking  monopoly,  or  as  it  is  sometimes  called, 
the  “Money  Trust”  was  examined  in  detail  by  the  Pujo 
Committee  of  the  House  of  Representatives,  which  pre- 
sented a summary  of  its  report  on  February  28,  1913.  The 
Committee  placed,  at  the  center  of  its  diagram  of  financial 
power,  J.  P.  Morgan  & Co.,  the  National  City  Bank,  the 
First  National  Bank.  The  Guaranty  Trust  Co.,  and  the  Bank- 
ers Trust  Co.,  all  of  New  York.  The  report  refers  to  Lee, 
Higginson  and  Co.,  of  Boston  and  New  York;  to  Kidder, 
Peabody  & Co.,  of  Boston  and  New  York  and  to  Kuhn, 
Loeb  & Co.,  of  New  York,  together  with  the  Morgan  af- 
filiations, as  being  “the  most  active  agents  in  forwarding 
and  bringing  about  the  concentration  of  control  of  money 
and  credit”  (p.  56). 

The  methods  by  which  this  control  was  effected  are 
classed  by  the  Committee  under  five  heads : 

1.  “Through  consolidations  of  competitive  or  potentially 
competitive  banks  and  trust  companies  which  consolidations 
in  turn  have  recently  been  brought  under  sympathetic  man- 
agement” (p.  56). 

2.  Through  the  purchase,  by  the  same  interests  of  the 
stock  of  competitive  institutions. 

3.  Through  interlocking  directorates. 

4.  “Through  the  influence  which  the  more  powerful 
banking  houses,  banks,  and  trust  companies,  have  secured 
in  the  management  of  insurance  companies,  railroads,  pro- 
ducing and  trading  corporations  and  public  utility  corpora- 
tions, by  means  of  stock  holding,  voting  trusts,  fiscal  agency 
contracts,  or  representation  upon  their  boards  of  directors, 
or  through  supplying  the  money  requirements  of  railway, 
industrial,  and  public  utility  corporations  and  thereby  being 
enabled  to  participate  in  the  determination  of  their  finan- 
cial and  business  policies”  (p.  56). 

16 


5.  “Through  partnership  or  joint  account  arrangements 
between  a few  of  the  leading  banking  houses,  banks,  and 
trust  companies  in  the  purchase  of  security  issues  of  the 
great  interstate  corporations,  accompanied  by  understand- 
ings of  recent  growth — sometimes  called  Tanking  ethics’ — 
which  have  had  the  effect  of  effectually  destroying  competi- 
tion between  such  banking  houses,  banks,  and  trust  com- 
panies in  the  struggle  for  business  or  in  the  purchase  and 
sale  of  large  issues  of  such  securities”  (p.  56). 

The  completeness  of  the  control  which  was  exercised  by 
the  powerful  banking  houses  at  the  time  of  the  investiga- 
tion, is  indicated  in  the  affiliations  of  J.  P.  Morgan  & Co.* 

J.  P.  Morgan  & Co.  of  New  York  and  Drexel  & Co.  of 
Philadelphia  was  one  firm  composed  of  eleven  partners. 
The  firm  was  also  a partner  in  a London  and  in  a Paris 
banking  house.  The  firm  did  a general  banking  business, 
lending  money,  issuing  and  floating  securities,  etc.  The 
Pujo  Committee  was  unable  to  get  any  statement  showing 
the  resources  or  profits  of  the  firm.  On  Nov.  1,  1912  “it 
held  deposits  of  $162,491,819.”  Between  1902  and  1912  the 
firm  marketed  security  issues  of  corporations  “amounting 
in  round  numbers  to  $1,950,000,000  including  only  issues 
of  interstate  corporations”  (p.  57). 

The  Morgan  firm  had  extensive  affiliations.  Through  a 
voting  trust,  Morgan  & Co.  had  the  selection  of  the  entire 
board  of  directors  of  the  Bankers  Trust  Co.  The  Morgan 
Company  had  a similar  control  over  the  Guaranty  Trust 
Co.  Through  interlocking  directorates,  the  Company  con- 
trolled the  Astor  Trust  Co.,  the  National  Bank  of  Com- 
merce, the  Liberty  National  Bank,  and  the  Chemical  Na- 
tional Bank.  “Morgan  & Co.  and  their  nominees  thus 
control  or  have  a powerful  voice  in  banks  and  trust  com- 
panies in  the  city  of  New  York  with  resources  of  $723,- 
000,000”  (p.  60).  The  Morgan  firm  had  affiliations  with 
the  following  railroads — New  York  Central,  New  Haven, 
Southern,  Reading,  Erie,  Lehigh  Valley,  Chicago  Great 
Western,  Atchison,  Topeka  & Santa  Fe,  Pere  Marquette, 


♦These  facts  are  taken  from  the  summary,  Report  of  the  Pujo 
Committee,  (pp.  57  ff.) 


17 


and  four  smaller  rail  systems.  The  firm  organized  the 
United  States  Steel  Corporation,  the  International  Harves- 
ter Co.  and  the  General  Electric  Co.  The  firm  was  con- 
nected through  membership  on  the  boards  of  directors,  with 
the  American  Telephone  and  Telegraph  Co.,  the  Western 
Union  Telegraph  Co.,  the  Interborough  Rapid  Transit  Co., 
the  Hudson  and  Manhattan  Co.,  the  Philadelphia  Rapid 
Transit  Co.,  and  a large  number  of  less  important  organiza- 
tions. 

Morgan  & Co.,  the  First  National  Bank,  the  National 
City  Bank,  the  Bankers  Trust  Co.,  and  the  Guaranty  Trust 
Co.,  which  were  all  closely  affiliated,  had  extended  their 
control  until  they  held : 

118  directorships  in  34  banks  with  combined  resources  of 
$2,679,000,000. 

30  directorships  in  10  insurance  companies  with  total  as- 
sets of  $2,293,000,000. 

105  directorships  in  32  transportation  systems. 

63  directorships  in  24  producing  and  trading  companies 
having  a total  capitalization  of  $3,339,000,000. 

25  directorships  in  12  public  utility  corporations  with  a 
total  capitalization  of  $2,150,000,000. 

The  investment  banker  had  become,  what  he  was  ulti- 
mately bound  to  be,  the  center  of  the  system  built  upon  the 
century-long  struggle  to  control  the  wealth  of  the  continent 
in  the  interest  of  the  favored  few  who  happened  to  own 
the  choicest  natural  gifts. 

The  power  of  the  business  world  was  centered  about 
the  element  that  dealt  in  surplus.  This  element — the  in- 
vestment banker — is  the  nucleus  of  the  economic  group  that 
is  the  plutocracy. 


V.  THE  COHESION  OF  WEALTH 

The  struggle  for  wealth  and  power,  actively  waged  among 
the  business  men  of  the  United  States  for  more  than  a 

18 


century,  has,  by  a process  of  elimination,  subordination  and 
survival,  placed  a few  small  groups  of  strong  men  in  a 
position  of  immense  economic  power.  The  growth  of  sur- 
plus, and  its  importance  in  the  world  of  affairs  has  made 
the  investment  banker  the  logical  center  of  this  business 
leadership.  He,  with  his  immediate  associates  directs  and 
controls  the  affairs  of  the  economic  world. 

The  spirit  of  competition  ruled  the  American  business 
world  at  the  beginning  of  the  last  century;  the  forces  of 
combination  dominated  at  its  close.  Years  of  experience ; 
the  bitter  price  paid  during  the  periods  of  depression ; the 
instability  of  competitive  business;  the  growing  demand 
for  safe  investments — all  of  these  factors  played  their  part 
in  forcing  the  American  business  man  into  a position  where 
he  was  compelled  to  admit  that  competition  was  a disastrous 
experiment;  that  it  cost  far  more  than  it  was  worth  and 
that  the  business  of  the  future  must  be  founded  upon  other 
and  sounder  principles. 

The  new  order  was  the  product  of  necessity,  not  of 
choice.  The  life  of  the  frontier  had  ingrained  in  men  an 
individualism  that  chafed  under  the  restraints  of  combina- 
tion. It  was  the  compelling  forces  of  impending  calamity 
and  the  opportunity  for  greater  economic  advantage — not 
the  traditions  or  accepted  standards  of  the  business  world 
— that  led  to  the  establishment  of  the  centralized  wealth 
power.  American  business  interests  were  driven  together 
by  the  battering  of  economic  loss  and  lured  by  the  hope 
of  greater  economic  gains. 

Years  of  struggle  and  experience,  by  converting  a scat- 
tered, individualistic,  wealth-owning  class  into  a highly  or- 
ganized, closely  knit,  homogeneous  group  with  its  common 
interests  in  the  development  of  industry  and  the  safeguard- 
ing of  property  rights,  have  brought  unity  and  power  to 
the  business  world. 

Individually  the  members  of  the  wealth-controlling  class 
have  learned  that  “in  union  there  is  strength ;”  collectively 
they  are  controlled  by  the  “cohesion  of  wealth” — the  class 
conscious  instinct  of  an  associated  group  of  human  beings 
who  have  much  to  gain  and  everything  to  lose. 

19 


VI.  LAND  OWNERSHIP  AND  LIBERTY 


The  owners  of  American  wealth  have  been  molded  gradu- 
ally into  a ruling  class.  Years  of  brutal,  competitive,  econ- 
omic struggle  solidified  their  ranks — distinguishing  friend 
from  enemy,  clarifying  economic  laws,  and  demonstrating 
the  importance  of  co-ordination  in  economic  affairs.  Econ- 
omic control,  once  firmly  established,  opened  before  the 
wealth  owning  class  an  opportunity  to  dominate  the  entire 
field  of  public  life. 

Before  the  property  owners  could  feel  secure  in  their 
possessions,  steps  must  be  taken  to  transmute  the  popular 
ideas  regarding  “property  rights”  into  a public  opinion  that 
would  permit  the  concentration  of  important  property  in 
the  hands  of  a small  owning  class,  at  the  same  time  that 
it  held  to  the  conviction  that  society,  without  privately 
owned  land  and  machinery  was  unthinkable. 

Many  of  the  leading  spirits  among  the  colonists  had  come 
to  America  in  the  hope  of  realizing  the  ideals  of,  “Every 
man  a farm  and  every  farm  a man.”  Upon  this  principle 
they  believed  that  it  would  be  possible  to  set  up  the  free 
government  which  so  many  were  seeking  in  those  dark 
days  of  the  divine  right  of  Kings. 

For  many  years  after  the  organization  of  the  Federal 
Government  men  spoke  of  the  public  domain  as  if  it  were 
to  last  indefinitely.  As  late  as  1832  Henry  Clay,  in  a dis- 
cussion of  the  public  lands,  could  say:  “We  should  rejoice 
that  this  bountiful  resource  possessed  by  our  country,  re- 
mains in  almost  undiminished  quantity.”  Later  in  the  same 
speech  he  referred  to  the  public  lands  as  being  “liberally 
offered — in  exhaustless  quantities,  and  at  moderate  prices, 
enriching  individuals  and  tending  to  the  rapid  improvement 
of  the  country.”  * 

The  land  rose  in  price  as  settlers  came  in  greater  num- 
bers. Land  booms  developed.  Speculation  was  rife.  Ef- 
forts were  made  to  secure  additional  concessions  from  the 
Government.  It  was  in  this  debate,  where  the  public  land 


* Speech  in  the  Senate,  June  20,  1832.  Works  of  Colvin  Colton, 
ed.  New  York,  Putnams,  1904,  Vol.  7,  p.  503. 

20 


was  referred  to  as  “refuse  land”  that  Henry  Clay  felt  called 
upon  to  remind  his  fellow-legislators  of  the  significance  and 
growing  value  of  the  public  land.  He  said:  “A  friend  of 
mine  in  this  city  bought  in  Illinois  last  fall  about  two  thou- 
sand acres  of  this  refuse  land  at  the  minimum  price,  for 
which  he  has  lately  refused  six  dollars  per  acre.  ...  It  is 
a business,  a very  profitable  business,  at  which  fortunes  are 
made  in  the  new  states,  to  purchase  these  refuse  lands  and 
without  improving  them  to  sell  them  at  large  advances.”  * 

A century  ago,  while  it  was  still  almost  a wilderness, 
Illinois  began  to  feel  the  pressure  of  limited  resources — a 
pressure  which  has  increased  to  such  a point  that  it  has 
completely  revolutionized  the  system  of  society  that  was 
known  to  the  men  who  established  the  Government  of  the 
United  States. 

This  early  record  of  a mid-western  land  boom,  with  Illi- 
nois land  at  six  dollars  an  acre,  tells  the  story  of  every- 
thing that  was  to  follow.  Even  in  1832  there  was  not 
enough  of  the  good  land  to  go  around.  Already  the  com- 
munity was  dividing  itself  into  two  classes — those  who  could 
get  good  land  and  those  who  could  not.  A wise  man,  un- 
derstanding the  part  played  by  economic  forces  in  deter- 
mining the  fate  of  a people  might  have  said  to  Henry  Clay 
on  that  June  day  in  1832:  “Friend,  you  have  pronounced 
the  obituary  of  American  liberty.” 

Some  wise  man  might  have  spoken  thus,  but  how  strange 
the  utterance  would  have  sounded!  There  was  so  much 
land,  and  all  history  seemed  to  guarantee  the  beneficial 
results  that  are  derived  from  individual  land  ownership. 
The  democracies  of  Greece  and  Rome  were  built  upon  such 
a foundation.  The  yeomanry  of  England  had  proved  her 
pride  and  stay.  In  Europe  the  free  workers  in  the  towns 
had  been  the  guardians  of  the  rights  of  the  people.  Through- 
out historic  times,  liberty  has  taken  root  where  there  is 
an  economic  foundation  for  the  freedom  which  each  man 
feels  he  has  a right  to  demand. 


*Ibid,  p.  503. 


21 


VII.  SECURITY  OF  “ACQUISITIONS” 


Feudal  Europe  depended  for  its  living  upon  agriculture. 
The  Feudal  System  had  concentrated  the  ownership  of  prac- 
tically all  of  the  valuable  agricultural  land  in  the  hands  of 
the  small  group  of  persons  which  ruled  because  it  con- 
trolled economic  opportunity.  The  power  of  this  class 
rested  on  its  ownership  of  the  resource  upon  which  the  ma- 
jority of  the  people  depended  for  a livelihood. 

An  attempt  was  made  to  transplant  the  Feudal  System 
to  England,  but  it  was  not  successful.  When  in  1215  A.D. 
(only  a century  and  a half  after  the  Great  William  had 
made  his  effort  to  feudalize  England)  King  John  signed  the 
Magna  Charta,  the  principles  of  Feudalism  gave  way  to 
landlordism — the  basis  of  English  economic  life  from  that 
time  to  this. 

The  system  of  English  landlordism  (which  showed  itself 
at  its  worst  in  the  absentee  landlordism  of  Ireland)  dif- 
fered from  Feudalism  in  this  essential  respect — Feudalism 
found  its  expression  in  the  idea  of  the  divine  right  of  kings. 
English  landlordism  found  its  expression  in  the  idea  of 
divine  right  of  property.  English  landlordism  is  the  im- 
mediate ancestor  of  the  property  concept  that  is  universally 
accepted  in  the  business  world  of  today. 

The  evils  of  Feudalism  and  of  landlordism  were  well 
known  to  the  American  colonists  who  were  under  the  im- 
pression that  they  arose  not  from  the  fact  of  ownership, 
but  from  the  concentration  of  ownership.  The  resources 
of  the  new  world  seemed  limitless,  and  the  possibility  that 
landlordism  might  show  its  ugly  head  on  this  side  of  the 
Atlantic  was  too  remote  for  serious  consideration. 

With  the  independence  of  the  United  States  assured  after 
the  War  of  1812,  with  the  growth  of  industry,  and  the 
coming  of  tens  of  thousands  of  new  settlers,  the  future 
of  democracy  seemed  bright. 

Daniel  Webster  characterized  the  outlook  in  1821  by 
saying:  “A  country  of  such  vast  extent,  with  such  varieties 
of  soil  and  climate,  with  so  much  public  spirit  and  private 
enterprise,  with  a population  increasing  so  much  beyond 

22 


former  examples  ...  so  free  in  its  institutions,  so  mild  in 
its  laws,  so  secure  in  the  title  it  confers  on  every  man  to 
his  own  acquisitions — needs  nothing  but  time  and  peace  to 
carry  it  forward  to  almost  any  point  of  advancement.”  * 

“So  free  in  its  institutions,  so  mild  in  its  laws,  so  secure 
in  the  title  it  confers  on  every  man  to  his  own  acquisitions” 
— the  words  were  prophetic.  At  the  moment  when  they 
were  uttered  the  forces  were  busy  that  were  destined  to 
realize  Webster’s  dream,  on  an  imperial  scale,  at  the  ex- 
pense of  the  freedom  which  he  prized  so  highly.  Men  were 
free  to  get  what  they  could,  and  once  having  secured  it, 
they  were  safeguarded  in  its  possession.  Property  owner- 
ship was  a virtue  universally  commended.  Constitutions 
were  drawn  and  laws  were  framed  to  guarantee  to  property 
owners  the  rights  to  their  property,  even  in  cases  where  this 
property  consisted  of  the  bodies  of  their  fellow  men. 

The  nrovement  toward  the  protection  of  property  rights 
has  been  progressive.  Webster  as  a representative  of  the 
dominant  interests  of  the  country  a hundred  years  ago,  re- 
joiced that  every  man  had  a secure  title  to  “his  own  acqui- 
sitions,” at  a time  when  the  property  of  the  country  was 
generally  owned  by  those  who  had  expended  some  personal 
effort  in  acquiring  it.  It  was  a long  step  from  these  per- 
sonal acquisitions  to  the  tens  of  billions  of  wealth  in  the 
hands  of  twentieth  century  American  corporations.  Daniel 
Webster  helped  to  bridge  the  gap.  He  was  responsible,  at 
least  in  part,  for  the  Dartmouth  College  Decision  (1816) 
in  which  the  Supreme  Court  ruled  that  a charter,  granted 
by  a state,  is  a contract  that  cannot  be  modified  at  will  by 
the  state.  This  decision  made  the  corporation,  once  created 
and  chartered,  a free  agent.  Then  came  the  Fourteenth 
Amendment  (1868)  with  its  provision  that  “no  state  shall 
make  or  enforce  any  law  which  shall  abridge  the  privileges 
or  immunities  of  citizens  of  the  United  States ; nor  shall 
any  state  deprive  any  person  of  life,  liberty  or  property, 
without  due  process  of  law.”  The  amendment  was  intended 
to  benefit  negroes.  It  has  been  used  to  place  property  owm 
ership  first  among  the  American  beatitudes. 


59:^60^eeC^eS,,,  ^ e(L  Little,  Brown  & Co.,  1910,  pp. 


23 


Corporations  are  “persons”  in  the  eyes  of  the  law.  When 
the  state  of  California  tried  to  tax  the  property  of  the 
Southern  Pacific  Railroad  at  a rate  different  from  that 
which  it  imposed  on  persons,  the  Supreme  Court  declared 
the  law  unconstitutional.  This  decision,  coupled  with  that 
in  the  Dartmouth  College  case,  secured  for  a corporation 
“the  same  immunities  as  any  other  person;  and  since  the 
charter  creating  a corporation  is  a contract,  whose  obliga- 
tion cannot  be  impaired  by  the  one-sided  act  of  a legislature, 
its  constitutional  position,  as  property  holder,  is  much 
stronger  than  anywhere  in  Europe.”  These  decisions  “have 
had  the  effect  of  placing  the  modern  industrial  corporation 
in  an  almost  impregnable  constitutional  position.”  * 

Surrounded  by  constitutional  guarantees,  armed  with  le- 
gal privileges  and  prerogatives  and  employing  the  language 
of  liberty,  the  private  property  interests  in  the  United  States 
have  come  forward  from  victory  to  victory,  extending  their 
power  as  they  increased  and  concentrated  their  possessions. 


VIII.  SAFEGUARDING  PROPERTY  RIGHTS 

The  efforts  of  Daniel  Webster  and  his  contemporaries 
to  protect  “acquisitions”  have  been  seconded,  with  extraor- 
dinary ability,  by  business  organizers,  accountants,  lawyers 
and  bankers,  who  have  broadened  the  field  of  their  endeavors 
until  it  includes  not  merely  “acquisitions,”  but  all  “property 
rights.”  Daniel  Webster  lived  before  the  era  of  corpora- 
tions. He  thought  of  “acquisitions”  as  property  secured 
through  the  personal  efforts  of  the  human  being  who  pos- 
sessed it.  Today  more  than  half  of  the  total  property  and 
probably  more  than  three  quarters  of  productive  wealth  of 
the  United  States  is  owned  by  corporations.  It  required 
ability  and  foresight  to  extend  the  right  of  “acquisitions” 
to  the  rights  of  corporate  stocks  and  bonds.  The  leaders 
among  the  property  owners  possessed  the  necessary  qualifica- 
tions. They  did  their  work  masterfully,  and  today  cor- 


*“The  Constitutional  Position  of  Property  in  America,”  Arthur 
T.  Hadley,  Independent,  April  16,  1908. 

24 


porate  property  rights  are  more  securely  protected  than 
were  the  rights  of  acquisitions  a hundred  years  ago. 

The  safeguards  that  have  been  thrown  about  property  are 
simple  and  effective.  They  arose  quite  naturally  out  of 
the  rapidly  developing  structure  of  industrialism. 

First — There  was  an  immense  increase  in  the  amount  of 
property  and  of  surplus  under  the  control  of  the  wealth- 
owning class.  The  new  industry  that  came  into  being  with 
the  Industrial  Revolution  was  an  immense  improvement  on 
the  old  system  in  many  ways.  Economic  life  no  longer  de- 
pended so  exclusively  upon  agricultural  land.  Coal,  iron, 
copper,  cement,  and  many  other  resources  now  could  be 
utilized.  This  made  possible  a wider  field  for  property 
rights.  Again,  the  amount  of  surplus  that  could  be  pro- 
duced by  one  worker,  with  the  assistance  of  a machine, 
was  immensely  greater  than  under  the  agricultural  system. 

Second — The  new  method  of  conducting  economic  affairs 
gave  the  property  owners  greater  security  of  possession. 
Property  holders  always  have  been  fearful  that  some  fate 
might  overtake  their  property,  forcing  them  into  the  ranks 
of  the  non-possessors.  This  terror  of  the  loss  of  property 
is  the  specter  that  stalks  through  the  lives  of  the  propertied 
classes  everywhere. 

When  property  was  in  the  form  of  bullion  or  jewels, 
the  danger  of  loss  was  comparatively  great,  since  a robber 
might  get  away  with  a whole  fortune  in  a night.  The  Feudal 
aristocracy,  with  its  land-holdings,  was  more  secure.  Land- 
holdings  were  also  more  satisfactory.  Jewels  and  plate  do 
not  pay  any  rent  but  tenants  do.  Thus  the  owner  of  land 
had  security  plus  a regular  income. 

The  corporation  facilitated  possession  by  providing  a 
means  (stocks  and  bonds)  whereby  the  property  owner  was 
under  no  obligation  other  than  that  of  clipping  coupons  or 
cashing  interest  checks  upon  “securities”  that  are  matters 
of  public  record;  issued  by  corporations  that  make  detailed 
financial  reports;  and  that  are  subject  to  vigorous  public 
inspection  and  in  the  cases  of  banks  and  other  financial  or- 
ganizations of  the  most  stringent  regulation. 

25 


Third — Greater  permanence  has  been  secured  for  prop- 
erty advantages.  Corporations  have  perpetual,  uninter- 
rupted life.  The  deaths  of  persons  do  not  affect  them.  The 
corporation  also  overcame  the  danger  of  the  dissipation 
of  property  in  the  process  of  “three  generations  from  shirt 
sleeves  to  shirt  sleeves.”  The  worthless  son  of  the  thrifty 
parent  may  still  be  able  to  squander  his  inheritance,  but 
that  simply  means  a transfer  of  the  title  to  his  stocks  and 
bonds.  The  property  itself  remains  intact. 

Fourth — Property  has  secured  a claim  on  income  that  is, 
in  the  last  analysis,  prior  to  the  claim  of  the  worker. 

When  a man  ran  his  own  business,  investing  his  capital, 
putting  back  part  of  his  earnings,  and  taking  from  the 
business  only  what  he  needed  for  his  personal  expenses, 
“profits”  were  a matter  of  good  fortune.  There  were  “good 
years”  and  “bad  years,”  when  profits  were  high  or  low. 
Many  years  closed  with  no  profit  at  all.  The  average  farmer 
still  handles  his  business  in  that  way. 

The  incorporation  of  business,  and  the  issuing  of  bonds 
and  stocks  has  revolutionized  this  situation.  It  is  no  longer 
possible  to  “wait  till  things  pick  up.”  If  the  business  had 
issued  a million  in  bonds,  at  five  per  cent,  there  is  an  in- 
terest charge  of  $50,000  that  must  be  met  each  year.  There 
may  be  no  money  to  lay  out  for  repairs  and  needed  improve- 
ments, but  if  the  business  is  to  remain  solvent,  it  must  pay 
the  interest  on  its  bonds. 

Businesses  that  are  issuing  securities  to  the  public  face 
the  same  situation  with  regard  to  their  stocks.  Wise  direc- 
tors see  to  it  that  a regular  rate  of  dividends  is  paid.  Regu- 
larity means  greater  certainty,  and  stability,  hence  better 
consideration  from  the  investing  public. 

Fifth — The  practices  of  the  modern  economic  world  have 
gone  far  to  increase  the  security  of  property  rights. 

Business  men  have  worked  ardently  to  “stabilize”  busi- 
ness. They  have  insisted  upon  the  importance  of  “business 
sanity;”  of  conservatism  in  finance;  of  the  returns  due  a 
man  who  risks  his  wealth  in  a business  venture;  and  of 
the  fundamental  necessity  of  maintaining  business  on  a 
sound  basis.  After  centuries  of  experiment  they  have 

26 


evolved  what  they  regard  as  a safe  and  sane  method  of 
financial  business  procedure.  Every  successful  business 
man  tries  to  live  up  to  the  following  well-established  for- 
mula. 

First,  he  pays  out  of  his  total  returns,  or  gross  receipts, 
the  ordinary  costs  of  doing  business — materials,  labor,  re- 
pairs and  the  like.  These  payments  are  known  as  running 
expenses  or  up-keep. 

Second,  after  up-keep  charges  are  paid  he  takes  the  re- 
mainder, called  gross  income,  and  pays  out  of  it  the  fixed 
charges — taxes,  insurance,  interest  and  depreciation.* 

Third,  the  business  man,  having  paid  all  of  the  necessary 
expenses  of  doing  business  (the  running  expenses  and  the 
fixed  charges),  has  left  a fund  (net  income)  which,  roughly 
speaking,  is  the  profits  of  the  business.  Out  of  this  net 
income,  dividends  are  paid,  improvements  and  extensions  of 
the  plant  are  divided  for. 

Fourth,  the  careful  business  man  increases  the  stability 
of  his  business  by  adding  something  to  his  surplus  or  un- 
divided profits. 

The  operating  statistics  of  the  United  Steel  Corporation 
for  1918  illustrates  the  principle. 

1.  Gross  Receipts  $1,744,312,163 

Mfg.  & Operating  expenses  including  or- 
dinary repairs  1,178,032,665 

Gross  earnings  566,279,498 

Other  income  40,474,823 


*A  depreciation  charge  is  one  that  is  made  against  the  wearing 
out  of  capital.  A paper  manufacturer  buys  a machine  for  which  he 
pays  $1,000.  Experience  tells  him  that  this  machine  will  wear  out 
in  ten  years.  Therefore,  the  manufacturer  sets  aside  each  year  a 
sum  which  at  the  end  of  ten  years  will  equal  $1,000  (a  new  ma- 
chine). In  this  way  the  business  man  keeps  his  capital  intact. 
While  the  individual  machines,  tools  and  the  like  do  wear  out,  the 
accounts  of  the  business  are  so  kept  that  these  pieces  of  capital 
will  automatically  be  replaced  when  they  are  too  old  for  use.  The 
depreciation  charge  is  recognized  everywhere  as  a legitimate  and 
necessary  fixed  charge  on  business. 

27 


2.  Gross  income  $606,754,321 

General  expense  (including  adm.  and  sell- 
ing exp.,  taxes,  etc.) 337,077,986 

Interest,  deprec.,  sinking  fund,  etc 144,358,958 


3.  Net  income  125,317,377 

Dividends  96,382,027 


4.  Surplus  for  the  year  28,935,350 

Total  surplus  460,596,154 


Like  every  carefully  handled  business,  the  Steel  Corpora- 
tion, 

1.  Paid  its  running  expenses. 

2.  Paid  its  fixed  obligations. 

3.  Divided  up  its  profits. 

4.  And  kept  a nest  egg. 

The  effectiveness  of  such  means  of  stabilizing  property 
income  is  illustrated  by  a compilation  (published  in  the 
Wall  Street  Journal  for  August  7th,  1919)  of  the  business 
of  104  American  corporations  December  31,  1914,  and  De- 
cember 31,  1918.  The  inventories — value  of  property 
owned — had  increased  from  1,192  millions  to  2,624  millions 
of  dollars ; the  gain  in  surplus,  during  the  four  years  was 
1,941  millions;  the  increase  in  “working  capital”  was  1,876 
millions.  These  corporations,  representing  only  a small 
fraction  of  the  total  business  of  the  county,  had  added 
billions  to  their  property  values  during  these  four  years. 

These  various  items — upkeep ; depreciation  ; insurance ; 
taxes  ; interest ; dividends  and  surplus — are  recognized  uni- 
versally by  legislatures  and  courts  as  “legitimate”  expenses. 
They,  therefore,  are  elements  that  are  always  present  in 
the  computation  of  a “fair”  price.  The  cost  to  the  con- 
sumer of  coffee,  shoes,  meat,  blankets,  coal  and  transporta- 
tion are  all  figured  on  such  a basis.  Hence,  it  will  be  seen 
that  each  time  the  consumer  buys  a pair  of  shoes  or  a pound 
of  meat,  he  is  paying,  with  part  of  his  money,  for  the  stabil- 
izing of  property. 


28 


Sixth.  Property  titles  under  this  system  are  rendered 
immortal.  A thousand  dollars,  invested  in  1880  in  5 per 
cent.  40  year  bonds,  will  pay  to  the  owner  $2,000  in  interest 
by  1920,  at  which  time  the  owner  gets  his  original  thou- 
sand back  again  to  be  re-invested  so  long  as  he  and  his 
descendants  care  to  do  so.  The  dollar,  invested  in  the  busi- 
ness of  the  steel  corporation,  by  the  technical  processes  of 
bookkeeping,  is  constantly  renewed.  Not  only  does  it  pay 
a return  to  the  owner,  but  literally,  it  never  dies. 

The  community  is  built  upon  labor.  Its  processes  are 
continued  and  its  wealth  is  recreated  by  labor.  The  men 
who  work  on  the  railroads  keep  the  road  operating;  those 
who  own  the  railroad  owe  to  it  no  personal  fealty,  and  per- 
form upon  it  no  personal  service.  If  the  worker  dies,  the 
train  must  stop  until  he  is  replaced;  if  the  owner  dies,  the 
clerk  records  a change  of  name  in  the  registry  books. 

The  well-ordered  society  will  encourage  work.  It  will 
aim  to  develop  enthusiasm,  to  stimulate  activity.  Neverthe- 
less, in  “practical  America,,  a scheme  of  economic  organ- 
ization is  being  perfected  under  which  the  cream  of  life 
goes  to  the  owners.  They  have  the  amplest  opportunities. 
They  enjoy  the  first  fruits. 


IX.  PLUTOCRACY 

The  owning  class  in  the  United  States  is  established  on 
an  economic  basis — the  private  ownership  of  the  earth.  No 
more  solid  foundation  for  class  integrity  and  class  power 
has  ever  been  discovered. 

The  owners  of  the  United  States  are  powerfully  en- 
trenched. Operating  through  the  corporation,  its  members 
have  secured  possession  of  the  bulk  of  the  more  useful  re- 
sources, the  important  franchises  and  the  productive  capital. 
Where  they  do  not  own  outright,  they  control.  The  earth, 
in  America,  is  the  landlord’s  and  the  fullness  thereof.  They 
own  they  are  able  to  secure  a vast  annual  income — from 
15  to  20  billions  a year — in  return  for  their  bare  owner- 
ship. 


29 


The  possibility  of  living  without  working,  by  ownership 
alone,  and  of  passing  on  this  right  to  succeeding  genera- 
tions enables  families  to  perpetuate  themselves  on  a plane 
different  from  that  occupied  by  the  remainder  of  the  com- 
munity. 

Families  which  enjoy  property  income  have  one  great 
common  interest — that  of  perpetuating  and  continuing  the 
property  income;  hence  the  “cohesion  of  wealth.”  “The 
cohesion  of  wealth,,  is  a force  that  welds  individuals  and 
families  who  receive  property  income  into  a unified  group 
or  class. 

The  cohesion  of  wealth  is  a force  of  peculiar  social  sig- 
nificance. It  might  perhaps  be  referred  to  as  the  class  con- 
sciousness of  the  wealthy  except  that  it  manifests  itself 
among  people  who  have  recently  acquired  wealth,  more  vio- 
lently, in  some  cases,  than  it  appears  among  those  whose 
families  have  possessed  wealth  for  generations.  Then,  the 
cohesion  of  wealth  is  not  always  an  intelligent  force.  In 
the  case  of  some  persons  it  is  largely  instructive. 

Originally,  the  cohesion  of  wealth  expressed  itself  in- 
stinctively among  a group  of  wealth  owners.  They  may  be 
competing  fiercely  as  in  the  case  of  a group  of  local  banks, 
department  stores,  or  landlords,  but  let  a common  enemy 
appear,  with  a proposition  for  currency  reform,  labor  leg- 
islation or  land  taxation  and  in  a twinkling  the  conflicting 
interests  are  welded  into  a coherent,  unified  mass.  This  is 
the  beginning  of  wealth  cohesion.  It  develops  rapidly  into 
a wealth  consciousness. 

American  business,  a generation  ago,  was  highly  com- 
petitive. Each  business  man’s  hand  was  raised  against  his 
neighbor  and  the  downfall  of  one  was  a matter  of  rejoicing 
for  all.  The  bitter  experience  of  the  nineties  drove  home 
some  lessons ; the  struggle  with  labor  brought  some  more ; 
the  efforts  at  government  regulations  had  their  effect;  but 
most  of  all,  the  experience  of  meeting  with  men  in  various 
lines  of  business  and  discussing  the  common  problems 
through  the  city,  state  and  national  and  business  organiza- 
tions led  to  a realization  of  the  fact  that  those  who  owned 
and  managed  business  had  more  in  common  than  they  had 

30 


in  antagonism.  By  knifing  one  another  they  made  them- 
selves an  easy  prey  for  the  unions  and  the  government.  By 
pooling  ideas  and  interests  they  presented  a solid  front  to 
the  demands  of  organized  labor  and  the  efforts  of  the  pub- 
lic to  enforce  regulation. 

The  thorough-going  organization  of  business  men  in  all 
kinds  of  associations  designed  to  promote  their  common 
interests  is  one  of  the  most  significant  phenomena  of  the 
age.  Business  men  have  learned  that  in  union  there  is 
strength. 

“Plutocracy”  means  control  by  those  who  own  wealth. 
The  “plutocratic  class”  consists  of  that  group  of  persons 
who  control  community  affairs  because  they  own  property. 

The  plutocracy  is  the  logical  outcome  of  the  private  owner- 
ship of  the  means  of  production.  The  private  owners,  hav- 
ing a special  privilege  which  they  seek  to  perpetuate,  unite 
their  interests  for  the  purpose  of  attaining  their  ends.  Such 
a result  must  follow  from  the  very  existence  of  a group  of 
professional  parasites. 


X.  BANKERS  OF  THE  WORLD  UNITE! 

The  capitalists  of  the  United  States  have  blazed  the  trail 
in  the  field  of  economic  organization  by  establishing  the  One 
Big  Union  of  business  interest.  It  is  more  than  half  a 
century  since  Karl  Marx  wrote — Workers  of  the  World, 
Unite!  The  American  plutocrats  have  recognized  the  wis- 
dom of  the  advice  and  have  followed  it  first.  John  D. 
Rockefeller  is  the  most  consistent  practitioner  of  the  teach- 
ings of  Karl  Marx  that  there  is  at  the  present  time  in  the 
United  States.  To  be  sure  he  modified  the  formula  by  sub- 
stituting “Bankers”  for  “Workers”  but  he  understood  and 
accepted  the  principle. 

The  class  solidarity  of  the  American  plutocracy  is  the 
result  of  long  years  of  bitter  experience.  It  required  gen- 
erations of  hardship  before  they  realized  the  needless  ex- 
penses involved  in  competition  and  the  immense  advantages 
that  may  be  derived  from  co-operative  effort.  Ultimately 

31 


they  learned  their  lesson  and  during  the  past  fifty  years 
they  have  been  putting  it  more  and  more  successfully  into 
the  daily  practices  of  business  life. 

Strength  comes  through  unity.  The  strength  of  the  Amer- 
ican plutocracy  is  due  to  the  effectiveness  with  which  the 
manufacturers,  merchants,  brokers,  bankers  and  lawyers 
stand  by  one  another  in  their  efforts  to  conserve  and  pro- 
tect property.  They  have  given  one  of  the  most  effective 
demonstrations  that  has  ever  been  staged  in  a short  time  oi 
the  extraordinary  results  that  may  be  expected  to  follow 
from  a well-conceived  policy  of  social  co-operation. 

Heretofore  the  ruling  class  has  acquired  its  solidarity 
after  generations  or  centuries  of  struggle.  The  ruling  class 
in  the  United  States  has  built  up  its  newer  concepts  of  busi- 
ness unity  almost  over  night. 

The  lesson  is  there,  written  upon  the  pages  of  American 
economic  history  in  words  so  simple  that  even  those  who 
have  little  learning  may  read  and  understand.  Sooner  or 
later  the  American  workers  will  follow  the  example  set  by 
the  American  capitalists.  They  too  will  have  their  stand- 
ards of  intelligent  solidarity,  designed  to  protect  human 
rights  in  exactly  the  same  way  that  the  solidarity  of  busi- 
ness protects  the  rights  of  property. 


32 


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aas-4- 


Should  Socialism  Prevail 


A DEBATE  BETWEEN 

AFFIRMATIVE  NEGATIVE 

Professor  Scott  Nearing  Rev.  Dr.  John  L.  Belford 
Mr.  Morris  Hillquit  Prof.  Frederick  M.  Davenport 


PUBLISHED  BY 

Rand  School  of  Social  Science 

AND 

New  York  Gall 


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Should  Socialism  Prevail? 


BROOKLYN,  NEW  YORK 

Under  the  Auspices  of 

THE  BROOKLYN  INSTITUTE  OF  ARTS  AND  SCIENCES, 

SUBJECT: — Resolved,  that  Socialism  ought  to  prevail  in  the 
United  States, 


A DEBATE 


HELD  OCTOBER  21,  1915 


AFFIRMATIVE 


NEGATIVE 


Professor  Scott  Nearing 
Mr.  Morris  Hillquit 


Professor  Frederick  M,  Davenport 
J.  Herbert  Lowe,  Chairman 


Rev,  Dr.  John  L.  Belford 


Edited  by  William  M.  Feigenbaum 


Published  by  The  Hand  School  of  Social  Science. 


New  York,  1916 


Copyright  1916 
by 

Rand  School  of  Social  Science- 
New  York  City 


Introductory  Note 

On  the  21st  of  October,  1915,  there  was  held  under  the  aus- 
pices of  the  Brooklyn  Institute  of  Arts  and  Sciences  a debate  on 
the  subject:  “Resolved:  that  Socialism  ought  to  prevail  in  the 

United  States.”  The  Institute  had  under  way  the  inauguration 
of  a Public  Forum  for  the  discussion  of  important  matters  of  pub- 
lic interest.  The  Department  of  Political  Science  and  Sociology 
had  been  holding  lectures  on  various  subjects,  and  it  was  felt  that 
the  debate  would  be  an  auspicious  opening  for  the  Forum. 

The  Institute,  which  is  an  organization  for  the  enlightenment 
of  its  many  thousands  of  members  on  a variety  of  subjects,  has  its 
headquarters  in  the  Academy  of  Music.  In  small  lecture  rooms, 
readings,  lectures  on  literary  and  scientific  subjects,  and  small  musi- 
cales,  are  held  throughout  the  year.  The  debate  on  Socialism  was 
to  have  been  held  in  one  of  the  smaller  rooms,  but  shortly  be- 
fore the  opening  of  the  discussion,  the  great  theater  in  which 
the  Metropolitan  Opera  Company  gives  its  weekly  performances 
had  to  be  requisitioned  into  service.  A half  hour  before  the  open- 
ing of  the  debate,  the  great  hall  was  packed,  and  thousands  were 
turned  away  for  lack  of  room. 

There  never  was  more  intense  interest  in  the  discussion  of 
an  academic  subject  than  there  was  that  day.  It  may  be  that  the 
prominence  of  the  speakers  drew  the  vast  crowd  to  the  Academy. 
It  may  be  that  the  fact  that  a man  who  had  just  been 
deposed  as  a teacher  in  a great  University  for  expressing  views 
that  grated  on  the  nerves  of  the  reactionary  trustees  was  to  be 
one  of  the  debaters  brought  the  multitude.  It  may  be  that  the 
interest  in  Socialism  was  so  genuine  that  the  crowds  thronged 
Lafayette  Avenue  and  tried  to  jam  their  way  in. 

Probably  a combination  of  all  these  was  the  reason 
for  the  success  of  the  debate.  Certain  it  is  that  the  vast  audience 
was  thrilled  by  one  of  the  most  electric  discussions  that  was  ever 


3 


heard  in  conservative  old  Brooklyn.  That  the  audience  was  par- 
tial was  shown  by  the  applause  that  the  speakers  received  when 
their  names  were  mentioned.  Nearing’ s name  was  cheered;  Hill- 
quit’s  received  its  meed;  Davenport’s  was  greeted  warmly.  But 
when  the  name  of  Dr.  Belford  was  mentioned,  the  wild  and  tumult- 
ous cheering  well-nigh  lifted  the  roof. 

ft  is  a known  fact  that  in  many  churches,  the  parishioners  were 
told  to  attend  this  debate  and  cheer  their  champion.  And  this 
makes  it  all  the  more  significant  that  at  the  end  of  the  evening,  the 
crowd  was  laughing  derisively  at  Belford’s  break  about  the  “for- 
eigners” in  the  Socialist  Party,  and  were  cheering  Hillquit’s  keen 
thrusts. 

The  Editor  wishes  to  express  his  thanks  to  the  Brooklyn  Insti- 
tute of  Arts  and  Sciences  for  their  courtesy  in  assisting  in  compil- 
ing these  notes,  as  well  as  to  the  Brooklyn  Daily  Eagle,  for  the  use 
of  two  of  the  pictures  herewith  reproduced. 

WILLIAM  MORRIS  FEIGEN BAUM. 


4 


ybS.y 

N p 
V. 

The  Debaters 

No  more  representative  debaters  could  have  been  chosen  than 
the  four  men  who  upheld  and  opposed  Socialism  that  night.  Scott 
Nearing,  discharged  from  his  Pennsylvania  berth  because  of  his 
radicalism;  and  Morris  Hillquit,  National  Chairman  of  the  Socialist 


(Courtesy  Brooklyn  Eagle) 

Party  of  the  United  States  upheld  Socialism.  Frederick  M. 
Davenport,  late  Progressive  candidate  for  Governor  of  New  York.. 


5 


a representative  of  the  advanced  opponents  of  Socialism,  and  the 
Rev.  Father  Belford,  a noted  Roman  Catholic  Priest  of  Brooklyn, 
attacked  it.  Indeed,  so  representative  were  the  men.  that  it  is 


Professor  Frederick  M.  Davenport 

(Courtesy  Brooklyn  Eagle) 


reported  that  practically  every  priest  in  Brooklyn  advised  his 
flocks  to  attend  and  see  Socialism  demolished. 

Father  John  L.  Belford  is  the  pastor  of  the  Church  of  the 


0 


Nativity,  in  Brooklyn.  He  is  editor  of  the  Nativity  Mentor,  the 
magazine  that  he  made  famous  some  four  years  ago  by  asserting 
in  its  pages  that  Socialists  are  the  mad  dogs  of  society,  to  be 
stopped,  if  need  be,  with  a bullet.  Later,  he  was  among  the  first 
of  the  Catholic  priests  to  come  out  openly  in  favor  of  suffrage  for 
women.  Catholics  assert  that  he  is  one  of  their  ablest  champions. 


PROF.  SCOTT  NEARING , 
Formerly  of  University  of  Pe^nsyh 
vania.. 


Whatever  weakness  there  may  have  been  in  his  arguments 
is  due,  not  to  an  un familiarity  with  the  subject  so  much  as  the 


7 


weakness  of  his  case.  For  he  is  thoroughly  familiar  with  the  So- 
cialist theory  and  literature. 

Professor  Davenport  is  a Progressive  in  both  the  literal  and 
political  senses  of  the  word;  he  is  a liberal,  he  is  a noted  scholar 
and  teacher,  and  he  is  a leading  member  of  the  Progressive  Party, 
having  been  its  candidate  for  Governor  in  1914.  As  Professor  of 
Law  at  Hamilton  College,  he  has  built  up  a national  reputation 


MORRIS  HILLQUIT 


Scott  Nearing  is  but  thirty-two  years  old,  but  is  better  known 
as  a scholar  than  many  men  of  twice  his  age  and  experience.  For 
the  past  nine  years  a university  teacher  at  Pennsylvania  and  Swarth 
more,  he  has  written  a series  of  brilliant  books  that  have  brought 


8 


home  to  masses  of  people  the  facts  of  economics  in  a way  that 
they  could  understand.  His  radicalism  is  well  known,  and  his 
adventures  with  reactionary  boards  of  trustees  are  recent  history. 
This  debate  was  his  first  public  appearance  in  New  York,  and  in 
the  eyes  of  a vast  majority,  he  distinctly  “made  good.” 

Morris  Hillquit  is  a Socialist  war  horse  of  nearly  thirty  years' 
service.  He  was  born  in  1870,  and  at  eighteen,  he  flung  himself 
into  the  movement  with  a devotion  and  an  enthusiasm  that  has 
not  flagged  in  all  the  years  that  have  followed.  Hillquit  is  a mem- 
ber of  the  National  Committee  of  the  United  States,  he  is  Amer- 
ican representative  on  the  International  Socialist  Bureau,  he  is  Na- 
tional Chairman  of  the  Socialist  Party,  he  is  the  author  of  a 
number  of  standard  Socialist  works,  he  is  a well-known  debater 
on  Socialism  and  kindred  topics,  and  if  the  capitalist  class  could 
buy  him,  he  would  be  cheap  at  any  price.  The  Brooklyn  Eagle 
was  not  far  wrong  when  it  called  him  the  .“kin g pin  Socialist  of 
America.” 

In  every  way,  this  debate  can  be  considered  one  of  the  most 
notable  that  New  York  ever  heard  on  Socialism.  The  debaters 
were  men  of  the  front  rank.  They  were  keyed  up,  and  they  did 
their  best.  The  vast  audience  was  thoroughly  responsive  to  their 
speeches,  and  at  times  the  interest  reached  the  wildest  enthusiasm, 
and  when  the  debate  was  over,  hundreds  of  people  crowded  the 
streets  for  hours  and  excitedly  discussed  the  evening's  entertain- 
ment, carrying  the  news  of  the  keenest  battle  of  wits  in  many  a 
day  all  over  Greater  New  York. 

The  Rand  School  and  The  Call  are  happy  to  put  this  intel- 
lectual treat  in  the  reach  of  the  hundreds  of  thousands  who  are 
interested  in  the  subject,  but  who  were  unable  to  get  into  the  halh 


9 


Chairman’s  Remarks 

J.  HERBERT  LOW,  (Chairman:)  Ladies  and  gentlemen:  The 
Institute  hopes  that  the  forum  inaugurated  tonight,  the  first  to  be 
held  by  the  Department  of  Political  Science  and  Sociology,  will 
be  looked  upon  as  a privilege  afforded  to  the  members.  We  need 
it  to  clarify  our  ideas  of  modern  problems,  and  it  is  wise  to  hear 
the  side  of  a question  for  which  we  do  not  have  sympathy.  If 
the  forum  can  help  to  make  clear  these  problems,  its  service  will 
be  a great  one.  That  it  is  wanted,  there  can  be  no  doubt. 

We  are  very  glad  to  be  able  to  offer  at  this  debate  men  of 
such  authority  on  the  issue  of  the  evening. 

Incidentally,  a number  of  you  will  want  to  argue  the  question 
after  the  debate  is  closed.  Two  minutes  will  be  allowed  you  to 
frame  your  questions,  and  only  two.  Statements  from  the  floor 
of  the  house  cannot  in  fairness  be  allowed,  because  the  members 
who  have  come  here  to-night  have  come  to  be  informed  on  the 
question  under  debate  by  the  speakers,  and  this  purpose  would  be 
defeated  if  the  subject  were  thrown  to  the  floor  of  the  house  for 
discussion. 

The  debaters  are  ready  to  answer  all  legitimate  questions. 
We  will  not  do  what  forums  have  done  in  the  past,  give  out  slips  of 
paper,  and  collect  the  questions  in  that  way.  Each  questioner  will 
state  his  or  her  own  question.  Each  questioner  will  wait  until 
recognized  by  the  chair  before  putting  the  question,  and  we  hope 
that  you  will  do  your  share  to  make  this  plan  a success  to-night. ' 

The  question  under  debate  is,  “Resolved,  that  Socialism  ought 
to  prevail  in  the  United  States.” 

The  speakers  for  the  affirmative  are,  Dr.  Scott  Nearing,  of 
Philadelphia  (Applause)  and  Mr.  Morris  Hillquit,  of  New  York. 
(Applause.)  On  the  negative,  are  Reverend  Father  Belford, 
(Tremendous  cheering)  of  Brooklyn,  and  Professor  Frederick  M. 
Davenport,  of  Hamilton  College. 

The  speakers  will  be  allowed  15  minutes  each;  on  rebuttal, 
10  minutes  each ; and  the  first  speaker  to  address  you  this  evening — 


• / V; 


JO 


or  before  1 mention  his  name  I should  state  to  yoti  that  Father 
Beiford  will  treat  the  moral  side  of  Socialism,  Professor  Daven- 
port the  economic  and  political  sides,  Professor  Nearing,  Socialism 
on  the  economic  side,  and  Mr.  Hillquit  will  take  up  the  orthodox 
Socialism.  The  first  speaker  of  the  evening,  Professor  Scott  Near- 
ing. (Great  applause.) 


u 


Professor  Scott  Nearing 

The  term  Socialism  as  we  will  use  it  to-night  means  the  col- 
lective or  community  ownership  and  management  of  the  social 
tools  of  production,— the  collective  ownership  and  management  of 
the  social  tools  of  production. 

It  does  not  make  very  much  difference  what  people  say:  the 
essential  thing  is  what  they  do.  You  will  find,  for  example,  in 
one  of  the  chapters  of  Matthew,  this  saying:  “The  Scribes  and 

Pharisees  sit  in  Moses’  seat : All  therefore  whatsoever  they  bid 
you  observe,  that  observe  and  do:  but  do  not  after  their  works: 
for  they  say,  and  do  not.” 

I want  to  run  over  very  briefly  with  you  some  of  the  things 
that  have  been  happening  that  are  rapidly  making  Socialism  in- 
evitable. In  my  estimation,  the  people  who  are  making  Socialism 
inevitable  are  the  people  who  control  deals  like  those  now  being 
revealed  in  the  New  Haven  inquiry — the  people  who  control  our 
public  and  municipal  utilities,  our  railroads,  our  iron  and  coal 
mines,  our  oil  wells, — and  who  cannot  control  their  own  greed. 
These  people  are  the  people  who  are  making  Socialism  as  inevita- 
ble as  it  is. 

We  as  a nation  started  out  in  this  country  over  a century  ago 
with  the  preposition  that  everybody  had  an  equal  right  to  life,  lib- 
erty, and  the  pursuit  of  happiness.  And  we  started  with  the  prop- 
osition that  the  way  to  make  people  happy  and  cheerful  was  to  give 
each  a bit  of  land.  The  scheme  worked  admirably  on  the  frontier, 
because  there  were  two  acres  of  land  for  every  man  who  wanted 
land,  and  two  tons  of  iron  for  every  man  who  wanted  iron,  and 
two  tons  of  coal  for  every  man  who  wanted  coal.  The  resources 
of  the  country  were  ample,  just  as  at  the  present  time  the  resources 
of  the  country  are  ample.  The  colonists,  remember,  were  stretched 
in  a narrow  fringe  down  the  Atlantic  Coast.  We  said:  “Give  each 
of  the  children  of  men  equal  right  to  the  use  of  the  earth,  and  we 
will  have  equality  of  opportunity.”  We  also  said  at  that  time,  in 
our  Constitutional  convention,  for  example,  that  those  things,  those 


12 


functions  of  society  which  can  best  be  performed  by  the  individual 
should  be  left  to  the  individual;  whereas  those  functions  of  society 
that  can  best  be  performed  by  the  community,  should  be  left  to  the 
community. 

I subscribe  thoroughly  to  the  dictum  of  Thomas  Jefferson, 
that  “that  government  governs  best,  which  governs  least” ; provided 
you  add  to  that  dictum  the  statement  that  a sufficient  amount  of 
government  must  be  provided  to  safeguard  the  welfare  of  the 
majority  of  the  people  in  the  community.  We  need  not  more  gov- 
ernment. but  sufficient  government.  The  first  Constitutional  con- 
vention put  into  the  hands  of  the  government  the  control  of 
State  affairs,  because  experience  had  shown  that  certain  activities 
can  be  carried  on  better  by  the  State,  like  the  coining  of  money, 
the  imposition  of  the  tariff,  and  like  community  affairs,  which 
cannot  successfully  be  carried  on  under  individual  control.  These 
things  were  put  under  Federal  control  on  the  general  theory  that 
community  welfare  comes  first.  Anything  which  is  best  carried  on 
by  the  individual  in  terms  of  community  welfare  should  be  carried 
on  by  the  individual.  Anything  which  is  best  carried  on  by  the 
government,  again  in  furtherance  of  community  welfare,  should 
be  put  under  the  control  of  the  government. 

Now,  I submit  to  you  that  these  two  propositions  are  still  as 
valid  as  they  were  then.  But  circumstances  have  changed.  We 
have  used  up  our  natural  resources.  There  is  no  more  good  free 
land.  The  great  natural  resources  are  all  in  the  possession  of  the 
coal  and  iron  and  steel  and  timber  and  other  great  interests.  They 
have  been  labelled  MINE — M-I-N-E-— by  some  one  who  knows  that 
the  very  s\  M em  which  in  1789  allowed  the  boy  to  buy  a bit  of  land 
and  develop  it,  and  gave  him  thereby  opportunity,  by  vesting  the 
ownership  of  the  land  in  the  great  corporations,  denies  to  the  boy 
born  in  1915,  the  opportunities  of  the  boy  in  1789.  Whereas  in  1789 
there  were  two  acres  of  timber  and  coal  for  every  one  who  needed 
them,  in  1915  the  choice  bits  of  the  earth’s  surface  are  pre-empted. 

Those  things  best  managed  by  the  individual  should  be  indi- 
vidually controlled.  Those  things  best  managed  by  the  community 
should  be  communally  controlled. 

13 


it  is  impossible  in  a very  short  discussion  like  this  to  go  into 
much  detail;  but  I should  like  to  take  you  into  this  much  detail, 
to  illustrate  the  thing  that  has  happened  when  great  corporate 
interests  have  secured  possession  of  the  natural  resources. 

About  fifty  million  people  in  the  United  States  use  hard  coal — 
ten  million  families;  and  all  of  the  important  hard  coal  in  the 
country  is  located  in  one  little  section  of  Pennsylvania.  There  are 
ten  important  railroads  carrying  hard  coal  out  of  that  section.  Ten 
groups  of  railroad  interests  control  90  per  cent,  of  the  unmined 
coal  and  nearly  nine-tenths  of  the  production  each  year.  In  other 
words,  nine-tenths  of  the  anthracite  coal  is  in  the  hands  of  ten 
anthracite  carrying  railroads.  There  are  certain  legal  provisions 
which  prevent  railroads  from  owning  coal ; but  what  is  the  constitu- 
tion among  vested  interests?  They  own  the  lands  just  the  same. 

Up  to  1898  while  the  railroads  controlled  those  lands  they 
never  succeeded  in  making  a sufficient  combination — something  en- 
tered in;  some  disturbing  factor;  some  busy  attorney  general,  or 
a defunct  railroad  that  broke  things  up. 

In  1898  the  railroads  got  things  about  the  way  they  wanted 
them.  Then  the  fun  began.  In  1898  the  dividends  paid  by  the 
anthracite  railro*ads  were  small.  It  was  a lean  year.  There  had 
been  a series  of  lean  years  since  1893.  For  1900,  the  average  divi- 
dend paid  by  the  ten  anthracite  roads  was  2 8-10th  per  cent. 
From  1900  to  1914  these  interesting  things  happened : 

The  amount  of  stove  coal  which  a consumer  could  purchase 
with  ten  dollars  at  New  York  moderate  prices  decreased  one  fifth — 
20  per  cent.  The  wage  rate  of  the  anthracite  miners  decreased  21 
per  cent.,  and  the  dividend  rate  of  the  coal  carriers  increased  about 
260  per  cent.  (Laughter  and  Applause.) 

In  other  words,  given  a great  natural  resource  under  the 
monopoly  control  of  a powerful  organization — in  this  case  of 
railroads^ — given  such  a situation,  the  worker  does  not  get  sufficient 
to  keep  up  with  the  rising  cost  of  living.  The  producer,  the 
profit-taker,  has  an  increase  in  profits  of  hundreds  of  per  cent, 
and  the  consumer  pays  the  entire  bill. 

14 


* 


So  true  does  this  hold,  that  during  the  hostilities  of  1912,  when 
the  miners  got  an  increase  of  hl/>  per  cent.,  that  wage  increase 
added  9 cents  to  the  price  of  a ton  of  coal.  The  railroads  raised 
the  price  25  cents  a ton,  and  made  16  cents  additional  on  the  coal. 

In  1914  dividends  averaged  9 1-10  per  cent,  for  each  of  the 
ten  railroads.  How  long  will  the  millions  of  people  who  need 
anthracite  coal  pay  that  kind  of  profits  to  railroads  or  any  great 
financial  interests  that  control  them? 

A piece  of  the  earth’s  surface  that  was  here  before  any  of  our 
railroad  managers,  or  others  ever  were  born,  which  according  to 
equity  and  justice,  as  I understand  it,  ought  to  be  the  property  of 
the  whole  American  people.  (Applause.) 

I started  out  by  saying  it  does  not  matter  what  people  say, 
but  what  they  do. 

The  anthracite  carrying  railroads  have  developed  an  economic 
situation  where  the  worker  does  not  get  enough  to  keep  up  with 
the  cost  of  living,  while  the  profit  takers  get  hundreds  of  per 
cent.  You  people,  the  consumers,  foot  the  total  bill. 

That  kind  of  a situation  duplicated  again  and  again  makes  it 
necessary  to  reapply  the  principle : Where  an  individual  produces 
things  best  in  an  individual  way,  the  individual  should  do  it,  but 
when  the  community  is  in  danger,  the  community  must  step  in 
and  do  the  work  collectively.  (Applause.) 


15 


CHAIRMAN : With  the  acquiescence  of  the  other  debaters. 
Father  Bel  ford  will  take  twenty  minutes  for  presentation,  and  five 
minutes  for  rebuttal  The  Reverend  Father  Belford,  (Tremen- 
dous cheering.) 

Rev.  Father  Belford 

Mr.  Chairman,  Ladies  and  Gentlemen:  The  reason  that  I asked 
for  twenty  minutes  was  because  I was  out  of  town  when  the  ar- 
rangements were  agreed  upon ; I thank  my  fellow-debaters  for 
their  courtesy  in  agreeing  to  the  time  that  I have  asked. 

In  an  editorial  on  the  Gary  school  system.  The  Continent , a 
secular  publication,  expresses  this  truth:  “Neither  this  republic 
nor  any  other  could  long  survive  if  the  majority  of  the  people 
ceased  to  be  conscious  that  they  are  answerable  to  God  for  their 
conduct  and  the  right  discharge  of  their  duties  of  life.”  This 
seems  to  be  the  conviction  of  those  who  vote  an  emphatic  “no”  to 
the  proposition  that  Socialism  is  good.  (Applause.) 

Let  us  examine  the  notion  of  Socialism.  There  are  many  ex- 
ponents and  as  many  definitions.  First  of  all,  it  is  a plan  to  re- 
organize society.  The  basis  of  that  reorganization  is  absolutely 
economic.  The  effect  they  seek  is  that  all  persons  shall  enjoy  lib- 
erty and  equality,  collectively  owning  and  utilizing  the  sources  of 
wealth  and  means  of  distribution  for  the  common  good.  Tn  other 
words,  it  aims  at  the  overthrow  of  the  existing  form  of  govern- 
ment and  the  establishment  of  a socialistic  state  which  will  own  all 
of  the  mines  and  mills,  the  factories,  the  railroads,  the  telephones 
and  telegraphs,  and  conduct  them  all  for  the  benefit  of  the  people. 
There  shall  be  no  male  or  female,  bond  or  free,  young  or  old. 
strong  or  weak,  wise  or  foolish.  The  State  will  be  supreme,  and 
all  members  will  be  equal.  It  will  own  and  employ  all;  it  will  pro- 
vide for  all.  In  it  there  will  be  no  such  things  as  competition,  no 
poverty,  and  practically  no  crime. 

To  insure  this,  most  of  the  existing  laws  must  be  swept  away, 
and  replaced  by  a new  code  that  will  rest  on  the  economic  basis 
that  livelihood  is  the  paramount  object  of  life,  It  must  necessarily 

16 


exclude  things  that  are  spiritual,  for  all  materialistic  Socialism 
denies  the  existence  of  everything  except  matter,  or  some  mode  or 
form  of  matter.  Most  of  us  believe  that  there  is  in  man  a spiritual 
soul,  and  any  system  that  does  not  provide  for  the  soul  cannot 
bring  about  any  improvement  in  the  nation.  The  real  life  of  man 
is  in  his  senses  and  affections,  and  they  are  the  functions  of  his 
spirit  If  we  are  to  change  society,  we  must  change  the  hearts  of 
those  who  make  up  society. 

Then  Socialism  brings  forward  the  great  remedy  of  State  own- 
ership. It  denies  the  right  of  any  one  to  own  property,  and  to 
profit  by  the  labor  of  others. 

Now,  nobody  denies  the  existence  of  evils  in  the  present  sys- 
tem. They  are  many  and  great.  Some  are  necessary  evils;  some 
are  excusable;  some  are  inexcusable.  They  are  not  intrinsic  to 
private  ownership.  There  are  those  which  can  be  prevented,  and 
which  we  are  slowly  and  surely  controlling  and  reducing,  and 
which  we  hope  some  day  entirely  to  eliminate. 

When  we  ask  the  Socialist  to  tell  us  the  details  of  his  indict- 
ment, he  usually  begins  with  the  inequality  that  prevails.  Now. 
inequality  is  not  confined  to  society.  It  exists  even  in  nature.  While 
we  are  all  born  equal,  there  are  certain  inequalities  which  can 
never  be  removed.  We  differ  in  height  and  strength  as  we  differ 
in  heart  and  mind.  Some  have  the  ability  to  teach,  to  plan,  to  pre- 
pare, while  others  go  in  to  follow,  and  learn.  Our  tastes  and 
desires  and  aspirations  are  as  various  as  the  flowers  that  bloom  in 
the  garden. 

Inequality  is  not  altogether  a curse.  While  undoubtedly  it 
deprives  some  of  the  accidental  goods  of  life,  it  has  been  the  in- 
spiration of  a charity  which  has  everywhere  made  noble  spirits 
share  their  goods  with  the  poor  and  lowly.  (Applause  and  laugh- 
ter.) It  has  nevertheless  blessed  the  world  with  the  gifts  of  per- 
sonal service  and  produced  sublime  examples  of  patience  and  for- 
bearance.. Some  of  our  useful  institutions  all  over  the  country 
have  done  their  best  to  mitigate,  if  they  cannot  entirely  relieve, 
suffering.  (Laughter. ) 


1 7 


Vice  and  crime  exist  here  as  they  exist  everywhere,  but  they 
exist  in  spite  of  honest  and  sustained  efforts  to  suppress  them. 

Naturally  they  flow  from  our  present  law. 

The  greatest  minds  the  times  have  ever  seen  have  done  their 
best  to  prevent  man  from  abusing  life  and  liberty.  They  have 
failed.  Man  has  a free  will.  He  can  be  taught  and  inspired,  but 
no  law  can  compel  him  to  speak  the  truth  and  do  justice.  Social 
crimes  are  the  accumulations  of  years  of  individual  guilt.  Our 
system  is  largely  the  fruit  of  public  opinion,  and  the  vast  majority 
of  the  people  of  this  country  will  have  truth  and  justice  and  seek 
to  make  it  prevail. 

The  cry  of  our  age  is  reform,  and  the  trend  is  toward  better- 
ment. Conditions  are  better  than  they  were  a generation  ago,  and 
the  next  generation  will  be  better  than  this. 

Excelsior  is  the  watchword  of  our  own  state  and  the  heart  cry 
of  America.  Education,  organization,  public  conscience  and  last  of 
all,  and  most  of  all,  the  only  power  that  can  mold  the  heart,  reli 
gion.  Religion  has  been  doing  its  best  to  check  privation  and 
eliminate  vice. 

We  are  told  that  the  great  source  of  vice  and  crime  is  private 
ownership.  To  it  they  trace  vice,  poverty  and  crime.  The  remedy 
they  propose  is  collective  ownership.  They  have  never  proved  that 
the  remedy  is  efficacious.  It  has  been  tried  on  a small  scale  time 
and  time  again  in  our  generation  and  in  generations  long  since 
passed,  and  has  always  failed.  Surely  if  a few  well-meaning  per- 
sons cannot  work  out  the  problem  in  a small  community,  we  have 
little  reason  to  believe  that  it  can  succeed  in  a nation  of  one  hun- 
dred million. 

Why  don  t they  try  it  in  some  single  state,  Kansas,  for  exam- 
ple? There  is  nothing  like  demonstration.  If  they  can  furnish  one 
grain  of  proof  it  will  do  more  to  convince  the  world  than  any 
arguments. 

Various  attempts  have  failed,  because  the  colonists  were  poor, 
or  the  land  was  unfertile.  These  communities  were  not  any  worse 
off  than  those  who  broke  ground  at  Jamestown  and  Plymouth 
They  have  lived  and  have  prospered. 

1 8 


The  states  in  which  the  best  conditions  prevail  are  those  where 
most  of  the  people  own  their  own  land.  Ownership  of  land  is  an 
incentive  to  progress.  Our  legislation  is  based  upon  it.  Man  loves 
to  say,  “This  is  my  home,  my  farm.”  The  thought  of  his  own 
efforts  to  perfect  it  is  a source  of  pride. 

Some  Socialists  will  say  it  is  all  right  for  a man  to  own  a 
mode^  home,  and  a reasonable  amount  of  help  is  permitted  him. 
They  lvill  not  allow  a man  to  hire  help  or  profit  by  the  labor  of 
others.  They  tell  us  the  product  belongs  to  the  producer.  The 
man  who  profits  by  the  labor  of  others  is  a thief  and  a robber. 
(Applause.) 

Here  we  come  to  their  theoty  of  surplus  value.  Dr.  Daven- 
port will  take  care  of  that.  Sufficient  to  say  that  theory  does  not 
stand  examination. 

The  farmer  profits  by  the  labor  of  the  laborer.  Say  he  pays 
him  $2.  Through  his  work  the  farmer  makes  $5.  Surely  the  la- 
borer does  not  produce  all  of  the  $7.  Does  not  the  land  do  some- 
thing? the  seeds?  the  tools?  the  fertilizer?  the  rain  and  sunshine  and 
knowing  how,  and  all  the  others?  (Applause.) 

Now  that  owner  is  not  a robber.  He  shares  with  the  field 
laborer  the  product  of  his  farm.  He  gives  him  a chance  to  earn  his 
daily  bread.  They  will  tell  us  the  farmer  does  not  pay  him  a suffi- 
cient wage.  If  he  does  not  do  it  it  is  the  duty  of  the  State  to 
force  him  to  do  so. 

Paying  the  laborer  less  than  he  deserves  is  a crime  that  cries 
to  heaven  for  vengeance. 

Human  nature  is  greedy.  There  is  an  instinct  in  us  to  get  all 
we  can  for  as  little  as  possible.  The  hunger  for  bargains  is  older 
than  department  stores.  Stealing  and  cheating  are  as  old  as  hu- 
manity. Socialism  cannot  cure  them.  Law  and  religion  have 
failed.  (Applause  and  laughter.) 

That  seems  to  make  such  an  impression  upon  you  that  I will 
repeat  it.  Law  and  religion  has  made  no  pretense  of  stopping 
stealing  and  cheating.  They  never  have  done  it  and  never  will. 

Wheat  and  weeds  are  growing  in  every  field,  and  the  wisest  of 


IQ 


teachers  has  advised  us  not  to  pull  up  the  weeds  lest  we  kill  the 
wheat 

The  right  to  the  ownership  of  that  which  he  has  fairly  re- 
ceived as  wages,  the  right  to  keep  it  or  give  it  away,  is  what  dis- 
tinguishes man  from  animals.  Man  has  reason,  animal  has  only 
instinct.  Man  provides  for  the  future,  and  lives  in  that  future,  and 
makes  provision  for  it. 

But  what  is  Socialism  going  to  give  us?  It  takes  account  of 
nothing  but  matter.  It  takes  care  of  the  perishing  body  and  trains 
the  mind,  but  it  has  no  regard  for  any  and  every  of  his  inner  needs 
and  motives— -the  real  life  of  human  nature.  (Applause.)  His 
inner  life  motives  are  of  far  more  value  than  the  uses  and  needs 
of  his  bod}'. 

The  home  is  the  grea*  social  unity.  Socialism  destroys  it. 
Socialism  tells  us  that  marriage  is  only  a very  temporary  arrange- 
ment, which  should  last  only  as  long  as  love  lasts;  and  when  love 
dies,  the  compact  is  dissolved.  An  example  of  the  creed  was  given 
us  the  other  day  in  New  York.  Things  are  bad  enough  now,  and 
what  would  they  be  if  we  repeal  the  laws  and  allow  men  to  follow 
their  whims  and  caprices?  (Applause.) 

The  American  Socialist  Party  platform  demands  the  education 
of  all  children  under  eighteen  years,  and  State  and  municipal  laws 
for  the  enforcement  of  this  policy.  Socialism  will  take  the  child 
from  its  parents  and  raise  it  scientifically,  in  the  State  school  and 
gymnasium : and  produce  the  splendid  animalism  of  Sparta  and 
Greece.  This  would  kill  the  fairest  flowers  that  we  have,  mother 
love  and  filial  devotion. 

Now,  just  as  the  product  belongs  to  the  producer,  so  do  chil- 
dren belong  to  their  parents,  and  they  have  every  right  to  bring 
them  up  according  to  their  own  conscience. 

Character  is  the  effect  of  three  forces,  heredity,  education,  and 
environment.  Education  involves  the  mind  as  well  as  the  soul  and 
body.  (Applause.) 


20 


CHAIRMAN:  The  second  on  the  affirmative,  Mr.  Hillquit 

Morris  Hillquit 

Ladies  and  Gentlemen  Incidentally  it  might  be  well  to  re- 
member that  the  subject  of  to-night’s  discussion  is:  Resolved,  that 
Socialism  ought  to  prevail  in  the  United  States.  By  way  of  diver- 
sion I shall  try  to  address  myself  to  that  subject.  (Laughter  and 
applause.) 

Socialism  ought  to  prevail  in  the  United  States.  It  ought  to 
prevail  all  over  the  world.  (Applause.)  It  ought  to  prevail  parti- 
cularly in  the  United  States  for  this  reason: 

If  the  people  of  this  country  are  proud  of  anything  in  their 
institutions  it  is  their  democracy,  and  democracy  is  not  and  can 
not  be  complete  without  Socialism.  (Applause.)  What  we  call 
democracy  is  the  equal  right  of  all  to  administer  their  common 
affairs.  We  do  have  a certain  semblance  of  political  democracy. 
We  all— that  is  all  sovereign  male  beings,  at  least,  have  a voice  in 
the  making  of  our  laws  and  institutions,  our  political  destinies. 

But  in  the  more  important  side  of  our  existence,  the  industrial 
side;  in  the  task  of  sustaining  the  lives  of  the  one  hundred  million 
human  beings  who  people  this  country,  we  allow  an  oligarchy,  a 
small  group  of  individuals,  much  less  than  one  per  cei.t.  of  the 
entire  population,  to  control  all  the  rest  of  us  and  to  say  how  and 
whether  we  shall  work  and  live. 

We  have  in  the  United  States  to-day  at  the  utmost,  one-half 
of  political  democracy.  The  other  half  we  shall  attain  when  the 
men  will  consent  to  enfranchise  the  women  of  this  country.  We 
have  absolutely  no  industrial  democracy.  Consequently,  we  are 
only  about  one-fourth  democratic. 

The  Socialists  say  that  there  can  not  be  such  a thing  as  partial 
democracy  and  partial  aristocracy.  We  can  not  be  half  slave  and 
half  free.  This  nation  will  have  to  choose  between  democracy  and 
despotism. 

Take  the  condition  of  this  country.  It  occupies  an  area  of 


21 


about  three  million  square  miles,  almost  as  much  as  that 
of  all  continental  Europe.  It  is  one  of  the  most  fertile  parts 
of  the  world,  abounding  in  every  kind  of  natural  wealth  and 
resources.  One  hundred  million  people  inhabit  it,  a good  third  of 
them  capable  of  producing  wealth,  of  making  the  things  which 
they  need  for  their  own  lives.  And  we  have  highly  developed 
industries  with  a veritable  network  of  railroads,  telephones  and 
telegraphs,  and  marvelous  machinery  of  toil.  We  can  produce 
to-day  with  them  one  hundred  times  as  much  as  our  grandfathers 
could  without  them.  There  ought  to  be  ample  wealth  in  thi s 
country  to  sustain  the  last  one  of  us  in  decent  comfort. 

But  what  do  we  see  instead?  A disappearingly  small  portion 
of  the  population  owns  the  country.  The  vast  majority  live  in 
dread  of  the  morrow,  have  not  enough  to  sustain  their  lives  from 
day  to  day.  Why?  Because  the  great  country  does  not  belong  to 
people  of  the  United  States.  The  country  with  all  the  soil  and 
all  the  wealth  on  it  belongs  to  a small  group  of  individuals  as  their 
exclusive  and  private  property.  The  land  upon  which  you  stand, 
you  tread  by  the  permission  of  your  landlord.  The  food  you  eat. 
you  get  by  permission  of  the  trusts.  The  work  that  you  do,  you 
do  by  permission  of  the  “owners”  of  the  land,  mines,  mills  ana 
factories. 

In  short,  the  people  of  the  United  States  do  not  depend  upon 
themselves  for  the  right  to  live  and  enjoy  what  they  produce,  but 
upon  a small  coterie  of  their  own  number.  That  is  what  we  call 
an  industrial  oligarchy.  That  is  what  Socialism  would  abolish. 
(Applause.) 

Socialism  stands  for  the  collective  ownership  of  the  social 
instruments  of  production,  as  Professor  Nearing  has  stated.  What 
does  that  mean? 

When  the  Socialists  repeat  the  popular  slogan,  America  for 
the  Americans,  they  mean  all  Americans.  Is  there  anything  heretic 
in  that?  When  we  speak  of  public  ownership  or  collective  owner- 
ship, we  do  not  mean  what  Dr.  Belford  thinks  we  mean.  We  do 
not  mean  that  the  State  is  to  be  the  one  big  employer,  assigning 


22 


to  each  oi  us  a job,  and  fixing  such  wages  as  it  may  please.  There 
are  some  industries  that  might  well  be  managed  by  the  national 
government  even  now,  such  as  railroads,  telephones,  telegraphs, 
mines  and  industries  that  have  already  attained  national  dimensions, 
such  as  the  steel  works. 

Some  industries,  on  the  other  hand,  the  municipalities  could 
best  operate,  some,  the  co-operative  societies,  and  there  are  others 
that  individuals  only  can  operate,  such  as  the  various  arts  and 
crafts.  The  point  is  not  so  much  who  operate  the  industries.  We 
object  to  the  power  of  any  person  to  control  the  labor  of  another 
person,  to  the  right  of  one  individual  to  amass  fortunes  at  the 
expense  of  others. 

Father  Belford  says,  Why,  that  is  a sacred  right,  a “human 
right.”  He  tells  you  about  the  farmer  who  employs  a farm  hand, 
paying  him  Two  Dollars,  and  “making”  Five  Dollars  for  him- 
self. “And,”  queries  Father  Belford,  “Does  not  nature  contribute 
to  the  production  of  the  other  five?  Does  not  the  soil  do  some- 
thing? And  how  about  the  sunshine,  the  air  and  all  other  bounties 
of  nature?” 

True!  But  does  Father  Belford  contend  that  God  has  created 
his  sunshine  for  the  farmer  and  not  for  the  farm  hand?  (Loud 
and  continued  applause  and  laughter.) 

There  is  another  reason  why  Father  Belford's  little  illustra- 
tion is  interesting.  Whenever  our  opponents  set  about  to  demolish 
Socialism  they  talk  about  the  hard  working  farmer.  (Laughter.^) 
What  about  Rockefeller,  who  does  not  know’  where  some  of  his 
vast  property  is  located,  or  where  his  money  comes  from,  but 
makes  thousands  of  men  work  for  him  and  surrender  to  him  the 
fruit  of  their  toil  ? What  about  the  railroad  magnate  who  hires 
hundreds  or  thousands  of  men  and  who  often  has  never  so  much 
as  examined  the  operations  of  his  road? 

“The  right  to  profits  and  property  is  sacred  because  the  intelli- 
gent human  being  foresees  the  future  and  stores  away  wealth  for 
his  offspring,”  says  Father  Belford.  I would  have  no  objection. 
Fd  store  away  all  the  property  I could  for  my  children,  because 
I love  my  children. 

23 


Bui  you  might  pbject  to  my  providing  for  my  children  at  the 
expense  of  yours,  and  that  is  precisely  what  the  affectionate 
capitalist  father  docs  to-day.  Father  Belford  says  Socialism  will 
abolish  all  possible  inequalities,  including  those  between  the  wise 
and  the  foolish;  even  we  Socialists  do  not  dare  to  hope  for  that. 
(Applause.) 

We  do  not  expect  to  abolish  inequalities.  We  expect  to  in- 
troduce some  new  inequalities.  We  have  too  many  equalities  now. 
Come  into  the  factories,  the  mines  and  mills,  where  hundreds  of 
thousands  of  workers  are  living  alike,  working  alike,  dressing  alike, 
talking  alike  and  thinking  alike,  and  you  will  have  a picture  of 
that  dread  and  dreary  equality  of  misery  which  characterizes  a 
great  portion  of  modern  society. 

And  then  we  are  asked.  Why  not  try  Socialism  in  sections  to- 
day? Try  Socialism  to-day!  Try  the  Twenty-first  Century  to-day; 
give  us  a sample  of  the  Kingdom  of  Heaven  here  and  now ; give 
us  Heaven  in  installments. 

We  can  not  introduce  the  future  by  sections. 

And  then  Father  Belford  assures  us  that  Socialism  will  not 
abolish  crime.  He  says  law  has  failed  and  religion  has  failed  to 
abolish  crime.  With  that  admission,  might  it  not  be  a fair  experi- 
ment to  let  Socialism  try  a hand  at  it?  (Laughter  and  applause.) 
If  religion  has  failed,  if  law  has  failed,  shall  we  therefore  resign 
ourselves  to  a world  of  everlasting  crime  and  vice,  or  shall  we 
try  some  remedy  that  at  least  has  not  yet  failed?  Now,  why  has 
religion  failed  to  check  crime,  and  why  have  laws  failed  to  check 
crime? 

[f  you  leave  this  hall  to-night  and  are  hungry,  and  have  starv- 
ing children  waiting  for  you  at  home ; if  you  pass  by  your  neighbor, 
who  has  a superfluity  of  everything  you  need  to  sustain  your  very 
life  and  the  lives  of  our  beloved,  you  may  resist  temptatior 
once,  and  you  may  resist  it  the  second  time,  but  at  last  you 
hunger  will  compel  you  to  take  the  food  that  your  body  craves  fof 
When  people  are  starving  they  are  not  accessible  to  bare  command 
of  the  law  or  to  abstract  canons  of  morality  and  religion.  A ser* 


24 


rnon  on  the  evil  of  stealing  will  not  deter  a starving  man  from 
taking  food  wherever  he  can  find  it.  Passing  a law  will  not  deter 
you.  But  if  you  are  given  bread,  you  will  not  steal!  (Applause.) 
The  error  of  law  and  of  religion  has  been  in  that  they  have  al- 
ways attempted  to  eradicate  crime  and  vice  without  changing  the 
conditions  which  inevitably  breed  them.  Socialism  alone  attempts 
to  abolish  crime  by  wiping  out  poverty,  the  mother  of  all  crime. 
(Applause.) 

We  do  not  claim  perfection  under  Socialism.  There  is  no 
such  thing  as  absolute  perfection.  We  do  not  care  for  it  It  would  be 
a monotonous,  tedious  world  to  live  in  if  everything  were  perfect. 
(Laughter.)  But  we  do  say  we  are  better  off  to-day  than  we  were 
fifty  years  ago;  we  should  be  a great  deal  better  off  in  twenty-five 
years  than  we  are  to-day,  and  that  the  ever  continuing  and  grow- 
ing process  of  betterment  makes  for  the  establishment  of  the  most 
humane  form  of  social  life  which  we  can  conceive  to-day— Social- 
ism. (Applause.) 


25 


CHAIRMAN  : The  second  speaker  on  the  negative,  Prolessor 
Davenport. 

Professor  Davenport 

Mr.  Chairman,  Ladies  and  Gentlemen : Father  Belford  proposes 
a pretty  bad  state  in  which  to  try  out  Socialism.  Kansas  is  a dry 
state  and  it  would  be  pretty  tough  to  try  it  out  where  there  would 
be  no  chance  to  drown  sorrow  and  disappointment  when  Socialism 
did  not  work. 

Every  state  exists  for  the  development  of  the  greatest  possi- 
ble amount  of  welfare  and  freedom  and  happiness  for  the  indi- 
vidual. In  every  state,  Socialism  and  individualism  are  comple- 
ments of  one  another.  Every  state  must  have  a certain  amount  of 
Socialism,  for  its  post-offices,  its  lighthouses,  for  example.  The 
only  question  is  as  to  whether  Socialism  in  any  country  shall  be 
dominant  and  controlling  in  volume  and  power. 

We  are  talking  about  Socialism  in  the  United  States,  which  has 
had  from  the  beginning  vast  resources,  vast  opportunities  for  indi- 
vidual freedom,  individual  ownership,  individual  ambition.  The 
genius  of  the  American  people  has  been  to  have  as  little  govern- 
ment as  possible,  but  we  have  learned  in  the  last  generation  the 
need  for  a much  wider  extension  of  governmental  function  than 
was  formerly  thought  necessary  or  desirable. 

I am  here  to  argue  that  Socialism  ought  not  to  prevail  in  the 
United  States.  I hold  that  it  ought  not  to  prevail  first,  because  the 
tendency  of  it  would  be  to  destroy  the  political  promise  of  Ameri- 
can life.  Socialism  would  take  land  out  of  the  field  of  private 
ownership.  Now  one  of  the  most  conspicuous  successes  of  our 
progress  has  been  the  homestead  policy  of  the  United  States,  by 
which  millions  of  individual  owners  have  been  given  a property 
stake  in  the  land  in  the  Middle  and  Far  West.  This  has  resulted 
in  a great  development  in  those  sections  of  independence  of  char- 
acter, and  a sense  of  freedom  and  right.  The  West  has  been  the 
vital  center  of  what  has  been  worth  while  in  our  political  democ- 


215 


racy.  Out  of  the  West  lias  come  the  movement  against  the  political 
machines  and  against  railway  and  trust  and  tariff  autocracy  and 
privilege.  The  West  is  full  of  the  spirit  of  the  common  good, 
and  it  is  spreading  out  of  the  West  all  through  the  country.  With  a 
proper  distribution  of  immigration  on  the  part  of  the  national  gov- 
ernment, there  is  room  for  millions  more  sturdy,  independent  own- 
ers of  small  farms,  cultivated  on  the  intensive  plan.  And  the 
result  will  be  further  increase  of  democracy  in  line  with  the  genius 
of  the  American  people. 

Socialism  would  destroy  the  political  promise  of  American 
life  also  by  overloading  our  political  democracy.  Our  state  gov- 
ernments already  are  breaking  down  on  the  side  of  efficiency, 
economy  and  responsibility.  The  government  at  Washington  is 
weak  in  the  same  direction.  1 am  as  good  a democrat  as  anybody, 
but  I recognize  the  limitations  of  democracy,  and  I don’t  wish  to 
see  it  cave  in  because  of  the  imposing  of  too  great  burdens  upon 
it.  Government  has  broken  down  already  in  many  of  our  com- 
monwealths and  the  real  rulers  of  society  are  not  the  representa- 
tives of  the  people. 

Then  along  comes  Socialism  and  wishes  to  pour  upon  govern- 
ment, upon  Congress,  upon  bureaus,  upon  managers,  that  we  may 
elect,  the  infinitely  more  complex  economic  and  financial  responsi- 
bilities and  duties  which  go  with  the  machinery  of  production  in 
the  United  States — vast  natural  monopoly,  public  utilities,  mines, 
factories,  the  larger  workshops,  the  land — directive  ability,  the  sav- 
ing of  capital,  the  fixing  of  prices,  the  fixing  of  wages — to  pour  all 
this  upon  the  state  and  ask  American  democracy  to  make  it  all 
work  better  than  under  private  ownership,  initiative  and  direction. 

Socialism  would  also  have  a tendency  to  destroy  the  social 
promise  of  American  life.  We  have  had  a great  deal  of  fierce, 
brutal  competition  in  this  country,  but  there  is  also  a mass  of 
altruism  here  and  a desire  to  make  this  the  best,  the  happiest,  and 
the  most  prosperous  country  in  the  world.  America  wishes  to  stand 
for  brotherhood. 


And  along  comes  Socialism  with  its  doctrine  of  the  class  strug- 
gle and  the  social  revQlution.  I understand  that  Socialism  did  not 
originate  the  class  struggle.  I understand  that  not  all  Socialists  are 
syndicalists  or  I.  W.  W.'s.  I understand  that  many  Socialists  be- 
lieve that  violence  is  at  least  not  expedient.  But  the  attitude  of 
mind  of  Socialism  towards  class  warfare  as  the  way  out  into  social 
revolution  and  millennium,  is  conducive  in  the  highest  degree  to 
antagonisms  and  frictions  and  hatreds  which  bid  fair,  if  not 
checked,  to  blight  the  social  promise  of  American  life. 

The  mind  of  the  United  States  is  now  set  against  the  class 
struggle.  We  are  beginning  to  see  how  much  we  lack  social  co- 
hesion. Out  in  San  Francisco,  there  are  no  citizens  of  San  Fran- 
cisco. They  are  only  citizens  of  the  labor  class,  or  citizens  of  the 
capitalist  class.  There  are  no  citizens  of  the  state  of  Colorado  for 
the  same  reason.  I know  about  the  fierce  brutality  on  both  sides  of 
the  labor  war  in  that  state,  and  young  John  D.  Rockefeller's 
scheme  of  an  industrial  republic  is  far  from  complete.  But  the 
spirit  shown  in  the  last  month  of  conciliation  and  humanity  and 
brotherhood  has  far  more  of  the  social  promise  of  American  life 
in  it  than  all  the  class  struggle  and  class  warfare  and  class  fric- 
tion upon  which  Socialism  depends. 

Socialism  would  also  destroy  the  economic  promise  of  Ameri- 
can life.  I am  not  belittling  the  evils  of  the  present  economic  sys- 
tem. But  on  the  side  of  production,  if  not  yet  on  the  side  of  dis- 
tribution, America  has  been  the  most  successful  country  in  the 
world.  Our  managers  of  production  have  been  trained  in  the  hard 
schools  of  experience,  by  natural  selection  under  free  competition, 
and  have  represented  the  survival  of  the  fittest.  Our  improve- 
ments and  inventions  have  made  possible  a great  surplus  of  saving, 
to  become  the  capital  of  new  enterprises.  Our  labor  has  not  been 
as  free  in  many  fields  as  it  ought  to  be,  but  through  collective  bar- 
gaining, through  the  action  of  government,  as  the  result  of  vast 
economic  prosperity,  there  has  not  been  increasing  misery,  but  on 
the  whole  increasing  welfare. 


28 


And  then  along  comes  Socialism  and  proposes  to  elect  by 
popular  vote  our  directive  ability  in  industry,  with  a laurel  wreath 
instead  of  pecuniary  profit  to  satisfy  ambition.  Technical  mas- 
tery  and  skill  cannot  be  selected  by  mass  voting  or  by  the  political 
insight  of  bureaucrats.  (Great  applause.) 


29 


CHAIRMAN  : In  rebuttal  on  the  affirmative,  Professor  Near- 


ing. 


Professor  Scott  Nearing 

John  D.  Rockefeller,  Junior — The  social  promise  of  American 
life!  (Laughter  and  applause.) 

The  only  social  promise  that  the  American  people  ask  is  the 
opportunity  to  make  their  living.  (Applause.)  Professor  Davenport 
seems  strangely  addicted  to  the  soil.  He  says  that  we  have  put 
individual  men  on  the  land,  and  given  them  a stake  in  the  land, 
and  that  they  are  now  the  promise  of  American  life.  We  put 
them  on  that  land,  and  gave  them  a stake  in  the  land.  Well,  what 
next?  He  says,  send  out  more  men.  Where?  .At  the  present  time 
in  Texas,  in  certain  counties,  55  per  cent,  of  the  people  who  run 
the  land  are  tenants.  Now  put  another  million  farmers  into  Texas, 
and  you  may  raise  the  percentage  to  seventy-five. 

However,  I very  much  prefer  to  come  back  to  New  York. 
(Laughter.) 

How  about  New  York?  Professor  Davenport  says  that  the 
government  is  breaking  down  under  the  strain.  What  strain  ? 
The  strain  of  the  Rockefeller  millions  is  breaking  down  democracy. 
(Applause.)  That  is  the  strain  that  is  breaking  down  democracy: 
the  strain  of  too  much  wealth  and  power,  vested  in  irresponsible 
private  hands.  That  is  the  strain  to  which  Mr.  Davenport  should 
turn  his  attention.  The  strain  to  which  the  government  has  been 
subject  is  the  strain  of  private  ownership  of  the  municipal  and 
public  utilities  of  the  nation.  (Continued  applause.) 

Dr.  Belford  says  that  law  and  religion  have  failed.  I should 
not  have  cared  to  go  that  far.  He  says  that  Socialists  hold  out  a 
bunch  of  promises  and  prophesies.  Has  he  no  promises  and  prophe- 
sies? I thought  that  of  all  men  the  minister  with  the  Bible  in  his 
hand  should  be  the  man  with  promises  and  prophesies,  because 
nowhere  else  under  the  face  of  heaven  do  we  have  so  many 
promises  and  prophesies  as  we  have  in  our  Christian  Bible.  (Ap- 

30 


plause.)  Promises  and  prophesies  must  be  a part  of  our  religion 
and  education. 

It  is  in  the  name  of  promises  and  prophesies  that  every  for 
ward  looking  man  speaks  his  mind. 

Then,  Dr.  Bel  ford  says,  Is  not  the  real  life  of  man  interior? 
Yes.  He  says  that  when  the  welfare  of  the  soul  is  not  safe- 
guarded, man  will  perish.  Yes.  The  real  life  of  man  is  interior. 

I have  been  reading  a description  of  the  lives  of  the  men  they 
call  the  muckers,  the  men  that  are  digging  the  Subway  under  your 
streets.  It  tells  of  a man  going  up  in  a garret  in  one  of  tne 
New  York  tenements,  and  having  the  bolt  drawn  back  by  a little 
boy  of  ten.  The  dining  room,  parlor  and  kitchen  were  all  one  room. 

“Where  is  your  mother  ?”  was  asked. 

“She  is  cleaning  downtown,”  came  the  reply. 

Then  he  told  how  the  baby  was  at  the  nursery;  his  father 
earned  $1.50  a day  as  a mucker. 

If  this  man  works  steadily  at  $1.50  a day,  it  means  $468  a year 
And  your  social  experts  tell  you  that  in  the  city  of  New  York,  a 
man  with  a wife  and  three  small  children  cannot  do  it  on  less  than 
$840.  Four  hundred  and  sixty-eight  dollars  to  keep  that  man,  wife 
and  three  babies — in  the  interior  life.  (Applause.) 

I tell  you,  Dr.  Belford,  that  the  thing  that  has  made  the  in- 
terior life  is  the  wage  conditions  that  are  provided  by  American 
industry  for  the  people  that  do  America’s  work.  You  go  through 
her  factories  right  here  in  New  York.  Never  mind  Kansas,  never 
mind  the  west. 

Sweep  your  own  dirty  backyard  clean.  (Applause.)  Right 
here  in  New  York  the  men  that  are  doing  your  work  in  the  sub  wav 
are  now  getting  $1.60.  because  they  could  not  get  men  at  $1.50. 
Think  of  it,  working  down  in  the  ground  for  $468  a year.  And 
you  cannot  keep  a family  decently  on  less  than  $840  in  New  York. 

You  talk  about  destroying  the  home.  If  this  present  system 
lasts  long  enough  there  won’t  be  any  homes  for  Socialism  to  de- 
stroy* (Applause.) 

As  I said  in  the  beginning,  f am  not  a Socialist.  I am  not  a 


member  of  the  Socialist  party,  but  a student  of  economics.  Look- 
ing at  your  problems;  there  are  the  monopolies  owned  by  a few 
on  the  one  hand,  and  on  the  other,  millions  of  people  that  are 
doing  your  work,  paid  a wage  that  won't  keep  body  and  soul  to- 
gether. That  is  what  keeps  the  ten  year  old  children  in  the  house, 
and  the  two  year  old  children  in  the  nurseries.  That  is  the  very 
thing  that  will  bring  Socialism. 

Say  the  man  is  sent  to  the  hospital.  The  children  are  then 
thrown  on  the  care  of  the  community  and  the  neighborhood. 
Socialism?  You  don't  need  Socialism  to  destroy  the  home.  The 
home  is  destroyed.  And  what  has  done  it?  The  thing  that  does 
it  is  the  low  wage. 

Who  stands  for  this  condition?  American  private  industries. 

We  have  private  industry  in  New  York  controlling  the  re- 
sources which  are  for  all,  controlling  the  capital,  and  exploiting 
the  laborers  out  of  millions  annually.  The  property  owners  take 
some  eight  thousand  million  dollars  a year  for  their  property  owner- 
ship, because  they  own  property. 

Socialism  does  not  promise  everything.  Neither  does  capitalism, 
but  if  law  and  religion  have  failed,  Socialism  comes  forward  with 
its  remedies  and  promises. 

One  of  these  promises  is  a democratic  life  given  when  every 
child  born  in  the  city  of  New  York  shall  have  an  equal  opportunity 
with  the  boy  and  girl  neighbors  to  show  what  his  capacities  and 
talents  really  are,  and  only  when  that  time  really  comes  will 
democracy  be  here.  (Applause.) 


CHAIRMAN  : The  first  speaker  on  the  negative,  in  rebuttal, 
the  Rev.  Father  Belford. 

Father  Belford 

The  difference  between  Mr.  Hillquit  and  myself  is  this:  Mr. 

Hillquit  appealed  to  passion,  and  I appealed  to  reason.  (Laughter.) 

The  difference  between  Professor  Nearing  and  Mr.  Hillquit 
and  myself,  the  differences  that  we  have  had  on  this  point,  are 
logical  to  a very  great  degree.  There  is  a great  deal  in  logic.  I 
laid  down  general  principles.  Against  ‘them  they  have  alleged 
particular  facts.  (Laughter.)  I know  the  abuses  of  capitalism. 
Didn't  I say  that  there  are  abuses  in  capitalism?  (Laughter.) 

Didn’t  I say  that  we  are  trying  our  best  to  make  them  right? 
What  are  you  people  doing?  Why  don’t  you  change  the  men  that 
make  your  laws?  Why  is  it  that  every  two  or  four  years  we  force 
out  a particular  political  administration?  Because  we  are  dissat- 
isfied with  them,  because  they  have  not  ameliorated  conditions. 

That  is  American  government  for  you.  That  is  our  American 
system.  When  they  speak  about  the  home,  they  point  to  a partic- 
ular home.  I point  to  the  fact  that  Socialism  would  break  up  the 
home.  I point  to  the  further  fact  that  Socialism  is  irreligious. 
Does  not  Mr.  Hillquit  tell  us,  does  he  deny  that  he  has  told  us, 
that  99  per  cent,  of  Socialists  land  in  agnosticism?  (Applause.) 

I say  that  if  you  want  to  make  man  right  you  will  have  to 
begin  on  the  inside.  The  curse  of  America  is  not  capitalism;  the 
curse  of  America  is  irreligion.  Only  60  per  cent,  belong  to  any 
church,  or  have  any  religion,  and  of  the  60  per  cent.,  50  per  cent, 
are  a disgrace  to  any  church.  (Laughter  and  applause.)  The  10 
per  cent,  are  the  salt  of  the  earth,  and  they  are  making  conditions 
better  than  they  found  them.  Conditions  are  improving  right  along 
because  of  this  church-going  10  per  cent.,  and  they  are  going  to 
be  better  still,  and  it  won’t  be  because  of  Socialism. 

The  point  is  this : Socialism  denies  the  right  of  private  owner- 
ship, That  is  a right  that  is  fundamental  in  nature  and  in  the 


American  system,  and  it  is  up  to  them  to  overthrow  it.  It  is  up  to 
them  to  show  us  why  it  is  wrong. 

Take  the  men  that  are  blowing  the  horn  of  Socialism.  Who 
are  they,  as  a rule?  I say  this  without  meanitag  to  offend  any  one. 
Are  they  not  a lot  of  foreigners?  (Hisses,  applause,  and  laughter.) 
I am  not  referring  to  Mr.  Hillquit  (laughter),  but  you  know  that 
this  is  true.  (Hisses.)  I say  Socialism  is  not  good  for  the  gov- 
ernment of  the  United  States  (hisses),  and  I say  it  is  not  good 
for  this  reason:  It  is  un-American  and  it  is  irreligious:  it  denies 
the  existence  of  a sovereign  God,  and  it  denies  the  existence  of 
anything  outside  of  matter  or  some  form  of  matter.  They  have 
thrown  religion  overboard. 

I believe  in  prophecy,  and  I believe  in  promises.  But  we  are 
talking  about  a particular  kind  of  prophecy  and  a particular  kind 
of  promises.  I believe  in  prophecy  by  some  one  who  has  creden- 
tials. (Laughter.)  If  you  think  that  over  you  won’t  laugh  at  it. 
(Loud  and  continued  laughter  and  applause.) 


M 


CHAIRMAN : The  second  speaker  on  the  affirmative,  Mr. 

Hillquit.  - 

Mr.  Hillquit 

Under  a system  of  Socialism  every  debater  will  be  given  five 
hours  for  his  main  speech  and  three  hours  for  his  rebuttal.  (Laugh- 
ter.) It  is  rather  difficult  to  answer  in  ten  minutes  the  two  speakers 
on  the  negative  side. 

I will  take  up  only  the  most  salient  points,  and  that  very 
briefly^.  First,  Dr.  Belford  asserts  that  I have  made  the  statement 
that  99  per  cent,  of  the  Socialists  are  agnostics.  He  says  I have 
never  denied  having  made  that  statement.  To  satisfy  him  I now 
and  hereby,  and  in  the  presence  of  Dr.  Belford,  do  make  solemn 
denial. 

I have  never  said  that  99  per  cent,  of  the  Socialists  are  agnos- 
tics, or  that  any  definite  proportion  of  them  are  agnostic.  I don’t 
know  any  more  the  percentage  of  Socialist  agnostics,  than  that  of 
the  Republican  or  Democratic  agnostics.  (Laughter.) 

What  forms  the  slim  foundation  of  this  assertion  is  this:  In 

a national  convention  of  the  Socialist  Party  a certain  proposed 
plank  in  the  platform  was  under  discussion.  It  was  to  the  effect 
that  the  Socialist  movement  is  a social  and  economic  movement 
and  is  not  concerned  with  matters  of  religion.  When  some  opposi- 
tion was  raised  to  this  plank,  I said  in  support  of  it  that  Socialism 
as  such  had  nothing  to  do  with  religion,  and  even  if  99  per  cent, 
of  the  Socialists  were  agnostic  that  would  not  make  Socialism 
agnostic. 

All  my  good  friends  of  the  Catholic  church  have  done  is  to 
eliminate  the  “if”  and  the  conclusion.  The  rest  they  quote  verba- 
tim. (Tremendous  cheering.) 

Second.  Although  Dr.  Belford  did  not  include  present  com- 
pany (Laughter),  he  did  assert  that  the  majority  of  Socialists  in 
this  country  were  foreigners,  and  that  observation  was  not  in- 
tended to  redound  to  the  credit  of  the  movement. 


35 


A great  many  things  have  come  from  foreign  countries,  Father 
Bel  ford,  which  have  added  to  the  progress  and  happiness  of  this 
country.  It  is  the  interchange  of  ideas,  attainments  and  men  be- 
tween the  countries  of  the  world  that  makes  for  intellectual  growth. 

I will  say,  however,  for  the  information  of  those  who  may 
need  it,  that  as  it  happens  the  Socialist  movement  in  this  country 
has  a larger  percentage  of  native  born  Americans  than  the  Repub' 
lican  or  Democratic  parties  can  boast  of.  (Applause.) 

I may  also  call  your  attention  to  another  thing.  The  English- 
men  who  are  foreign  here  are  native  subjects  in  England,  the 
Germans  who  -are  foreigners  here  are  native  subjects  in  Germany. 
They  have  few  foreigners  in  the  countries  of  Europe,  yet  there  is 
a Socialist  movement  in  every  advanced  European  country.  In 
fact,  there  is  not  a civilized  country  in  the  world  that  has  not  a 
Socialist  movement.  The  strength  of  the  Socialist  movement  in 
each  given  country  is  a pretty  reliable  test  of  the  degree  of  civiliza- 
tion in  that  country.  (Applause.)  American  Socialism,  like 
European  Socialism,  is  the  product  of  modern  social  and  economic 
conditions.  Neither  the  foreigners  nor  the  natives  are  responsible 
for  its  inception,  nor  can  they  check  its  growth. 

That  much  for  Father  Belford,  and  now  let  me  try  to  answer 
a few  objections  of  Professor  Davenport.  With  him  the  trouble 
seems  to  be  that  he  has  evolved  a certain  plan  of  social  progress, 
all  his  own,  a beautiful  and  harmonious  scheme,  but  along  comes 
Socialism  (Laughter)  without  credentials,  mind  you,  (Laughter) 
and  inconsiderately  interferes  with  it. 

First,  it  destroys  the  political  promise  of  American  life.  Pro- 
fessor Davenport  admits  that  our  political  democracy  is  not  per- 
fect; as  a matter  of  fact  it  is  a sham  democracy.  Not  because  we 
haven't  got  the  short  ballot  or  any  of  the  other  nostrums  advocated 
by  the  Professor,  but  because  our  legislators,  those  whom  Father 
Belford  wishes  to  turn  out,  our  executive  officials  in  a vast  number 
of  cases,  are  directly  or  indirectly  subservient  to  capitalist  interests. 
They  are  in  office  to  support  the  present  economic  system.  Politics 
is  nothing  but  a branch  of  the  capitalist's  business. 

The  great  corporations,  for  instance,  want  franchises,  privileges 

36 


khd  “protection/’  To  get  them  they  must  dominate  our  political 
institutions  and  corrupt  our  public  officials.  Under  Socialism  there 
will  be  no  private  production  for  profit,  hence  no  inducement  to 
political  corruption.  “Along  comes  Socialism,  and  spoils  the  poli- 
tical life  of  America.”  (Laughter  and  applause.) 

And  then  Socialism  would  spoil  the  social  promise  of  America. 
Socialism  is  so  very  impolite.  What  would  you  expect  of  a move- 
ment: based  on  class  struggle.  It  is  bad  manners  to  talk  about 
the  class  struggle.  (Applause.) 

Professor  Davenport  admits  the  existence  of  continuous  strife 
between  capitalists  and  workers.  In  California  and  Colorado  it  is 
very  acute  just  now.  Here  and  elsewhere  it  may  be  working  under 
the  surface,  but  it  is  with  us  all  the  time.  While  the  capitalists 
own  the  means  of  wealth  production,  and  the  workers  must  come 
to  them  for  permission  to  work  and  to  live,  there  will  be  struggle 
between  them.  But  Professor  Davenport  wants  us  to  forget  the 
unpleasant  thing.  Let  us  try  to  be  polite  and  friendly  as  John  D. 
Rockfeller,  Jr.  was  when  he  visited  his  Colorado  mine  workers. 
(Laughter.) 

We  Socialists  take  this  position.  The  class  struggle  exists. 
It  must  be  eradicated.  We  will  eradicate  it. 

It  is  suggested  by  our  opponents  that  we  close  our  eyes  to  the 
class  struggle.  What  would  you  think  of  a physician  who  is  con- 
sulted about  an  epidemic  of  typhoid  fever;  who  knows  that  the 
dread  disease  is  caused  by  a polluted  stream,  and  says,  “Oh,  let  us 
not  speak  of  impurities.  Let  us  think  of  all  streams  as  clear  and 
wholesome/’  (Laughter.) 

That  is  what  the  polite  apologists  of  the  capitalist  system  would 
have  us  do.  Forget  the  social  malady.  Forget  the  class  struggle, 
and  it  will  disappear  by  a miracle  of  Christian  Science.  (Laugh- 
ter.) 

The  Socialists  look  the  class  struggle  straight  in  the  face. 
They  are  organized,  for  the  purpose  of  changing  the  present  order 
with  all  its  iniquities  and  social  struggles. 

Along  comes  Socialism  and  destroys  the  social  promise  of 
America,  (Much  laughter  and  applause.) 

37 


CHAIRMAN:  The  final  speaker  in  rebuttal  on  the  negative, 
Professor  Davenport. 

Professor  Davenport 

Mr.  Plillquit  has  said  that  democracy  will  not  be  complete 
without  Socialism.  I say  that  substantial  democracy  will  be  com- 
plete without  it.  Democracy  does  not  mean  perfect  equality.  The 
only  kind  of  equality  which  we  are  absolutely  sure  of  in  this  world 
is  the  equality  of  suffering,  as  Abraham  Lincoln  said.  Mr.  Hill  - 
quit  has  said  that  we  of  the  negative  desire  to  forget  the  class 
struggle.  No,  I wish  every  man  to  have  the  vision  of  it  before 
him.  But  to  work  in  accordance  with  that  spirit  and  that  method 
which  will  bring  brotherhood  and  not  strife  in  America.  I com- 
mended young  Mr.  Rockefeller  because  he  seemed  to  have  for  the 
first  time  in  his  life,  during  his  trip  in  Colorado,  the  vision  of  the 
struggle,  and  the  beginning  of  a vision  of  how  to  stop  it. 

Socialism  falls  down  at  the  point  of  human  nature,  which  it 
does  not  seem  to  understand.  The  evils  and  the  wrongs  of  the 
present  industrial  system  we  must  do  away  with.  But  the  incen- 
tive and  discipline  of  the  present  industrial  system  is  of  real  ad- 
vantage to  human  nature.  A big  proportion  of  us  sit  as  still  as  we 
dare  to  be,  and  a very  large  majority  of  us  would  never  exercise 
the  quality  of  saving  if  we  could  help  it.  We  haven’t  yet  learned 
as  a nation  to  exercise  ordinary  political  control  over  ourselves. 
We  are  still  too  often  carried  by  our  emotions,  and  our  racial  and 
religious  and  economic  prejudices.  We  make  many  undiscriminat- 
ing judgments,  and  allow  our  bravest  leaders  to  be  maligned,  and 
refuse  to  honor  our  finest  fighters  until  after  they  are  dead. 

Just  because  we  recognize  the  natural  limitations  of  mass  democ- 
racy, we  do  not  wish  to  overload  it  with  too  much  responsibility. 
The  simple  questions  of  right  and  wrong  can  be  settled  by  the 
whole  people  better  than  by  any  portion  of  it.  I believe  in  sub- 
stantial political  democracy.  Upon  fundamental  policies,  I would 
pit  the  instinct,  the  courage,  the  common  sense,  and  the  conscience 


of  the  mass  of  the  people  against  all  the  genius  of  benevolent  des- 
pots and  aristocrats  of  the  world. 

But  we  must  not  proceed  by  revolution  and  overload  govern- 
mental democracy  with  the  vast  and  intricate  problems  of  economic 
production  and  distribution.  Let  us  proceed  by  evolution,  and  not 
by  revolution.  Let  us  go  ahead  with  our  present  day  program  of 
taxing  land  values,  of  inheritance  and  income  taxes,  of  social  wel- 
fare legislation,  of  control  over  industrial  organizations,  of  wages 
dividends,  of  a share  for  the  workers  in  the  ownership  of  the  tools 
of  production,  but  let  us  leave  the  directive  ability  to  be  selected 
in  the  old  way,  the  capital  to  be  saved  by  the  individual  in  the  old 
way.  Let  us  encourage  labor  to  work  out  its  freedom  and  welfare 
through  collective  bargaining,  and  the  other  measures  of  organized 
activity.  We  need  only  Socialism  enough  so  that  we  may  be  sure 
that  power  is  under  the  hat  of  the  state.  We  should  not  wish  to 
overload  democracy  with  Socialism.  (Applause.) 


Following  the  Debate 

Following  the  debate,  there  was  a Jteen  discussion  on  the  part 
of  the  audience  and  the  speakers.  Questions  were  volleyed  at  the 
debaters,  and  the  greatest  interest  was  displayed  on  the  part  of  the 
audience.  When  the  discussion  was  getting  to  be  most  interesting, 
some  member  of  the  Institute  proposed  a vote  of  thanks,  and  the 
audience  dispersed. 

One  gentleman  wanted  to  know  from  Dr.  Bel  ford,  that  if  re- 
ligion had  been  trying  for  two  thousand  years  to  stamp  out  vice 
and  crime,  and  had  not  succeeded,  how  much  longer  did  it  wanr. 
Dr.  Belford  replied  that  he  believed  that  the  question  was  asked 
in  a spirit  of  hate,  and  that  therefore  he  would  not  answer. 

The  following  account  of  some  of  the  questions  is  from  the 
Brooklyn  Daily  Eagle  of  October  22d : 

“Then  came  the  questions,  and  first  a woman  arose  and 
attempted  to  read  a lengthy  question.  When  she  had  thirty 
seconds  of  her  two  minutes  left,  she  suddenly  blurted  out 
that  Socialism  had  been  tried  in  Sparta  and  failed. 

“Mr.  Hillquit  answered  that  by  stating  that  there  was  no 
Socialism  in  Sparta,  so  far  as  he  knew. 

“A  young  man  then  arose  and  tried  to  get  Father  Belford 
to  define  a foreigner,  but  the  priest  refused. 

“ ‘This  is  a debate  on  Socialism/  interrupted  Chairman 
Low,  ‘and  I shall  have  to  rule  that  question  out  of  order.’ 

“Another  person  arose  in  the  gallery  and  wished  to  know 
what  guarantee  there  was  that  if  the  Socialists  got  into  power 
there  would  not  be  just  as  many  grafters  among  them  as  there 
are  in  the  old  parties. 

“‘There  would  be  no  one  to  offer  graft  to  them/  replied 
Mr.  Hillquit. 

“Then  a woman  stood  up,  far  back  in  the  gallery,  and,  with 
a worried  look,  wanted  to  know  who  would  mine  the  coal  if 
the  Socialists  were  in. 

w ‘I  wQplcJ  do  it  for  the  lady  if  the  compensation  was 


40 


proper/  said  Mr.  Hiliquit.  ‘Under  Socialism,  mining  can  be 
made  perfectly  attractive.  Then,  perhaps,  you  and  E can  do  a 
little  mining  together/ 

“There  were  several  other  questions,  most  of  them  fired  at 
Father  Belford,  and  one  from  the  young  man  who  asked  him 
to  define  a foreigner,  No  response  could  be  drawn  from  the 
priest.” 

Following  the  denial  by  Morris  Hiliquit  that  he  had  made  the 
statement  about  99  per  cent,  of  Socialists  landing  in  agnosticism. 
Or.  Belford  wrote  the  Editor  that  he  wanted  to  delete  that  state- 
ment from  his  speech.  But  as  the  statement  had  been  made  in  the 
presence  of  several  thousand  people,  it  is  only  fair  to  include  it, 
here  with  a note  of  the  request  of  the  speaker  for  its  deletion. 


WHAT  THE  RAND  SCHOOL  IS 

The  establishment  of  the  Rand  School  in  1906  was  made 
possible  by  an  endowment  provided,  at  the  suggestion  of  Prof. 
George  D.  Herron,  by  the  late  Mrs.  Carrie  D.  Rand,  with  a 
contributory  fund  added  by  her  daughter,  Mrs.  Carrie  Rand 
Herron,  who  showed  a keen  interest  in  its  work  till  her  un- 
timely death  early  in  1914.  The  income  from  this  fund  is  sup- 
plemented by  tuition  fees  and  by  donations  from  individuals 
and  organizations  in  sympathy  with  the  purpose  of  the  school. 

This  purpose,  as  originally  stated  and  as  since  adhered  to, 
is  twofold:  To  offer  to  the  public  opportunities  for  the  study 

of  Socialism;  and  to  offer  to  Socialists  instruction  on  lines 
calculated  to  make  them  more  efficient  workers  for  the  Cause. 

The  Rand  School  was  at  first  a purely  local  institution, 
offering  evening  and  Sunday  classes  in  Economics,  Sociology, 
History,  and  kindred  subjects,  and  also  in  English  and  Public 
Speaking,  for  residents  of  New  York  City  who  wished  to  use 
to  the  best  advantage  in  directed  study  such  time  as  they  could 
spare  from  their  bread  winning  occupations.  Some  attended 
but  one  session  a week,  some  two,  three,  or  even  four.  Many 
came  year  after  year  to  study  different  subjects.  The  sexes 
were  at  all  times  about  equally  represented  in  the  student  body. 
The  majority  were  mechanics,  factory  operatives,  and  office 
workers,  with  a sprinkling  of  school  teachers,  housewives,  pro 
fessional  persons,  and  others.  From  forty  to  sixty  per  cent, 
were  members  of  the  Socialist  Party  at  the  time  of  their  entry, 
and  many  of  the  others  joined  the  party  organization  during  or 
after  their  term  at  the  School.  Year  by  year  the  number  of 
individuals  attending  such  classes  at  the  central  building  in 
Nineteenth  Street  has  varied  between  200  and  450,  and  the 
aggregate  for  the  nine  years  runs  well  above  2,500.  But  these 
constitute  only  a fraction  of  the  whole  body  of  Rand  School 
students. 

It  soon  became  evident  that  the  work  of  the  School  should 
not  and  could  not  be  kept  within  such  narrow  limits.  Ex- 


tension  classes  were  formed  from  time  to  time  in  outlying 
parts  of  the  city  and  in  neighboring  counties  of  New  York  and 
New  Jersey,  and  in  1913  an  autonomous  branch  was  established 
in  the  East  Side.  The  number  of  persons  who  have  attended 
branch  classes  is  at  least  equal  to  those  who  have  studied  at 
the  central  school. 

As  the  work  of  the  Rand  School  became  known  through 
the  country,  requests,  for  a further  extension  of  its  services 
came  from  the  most  distant  places.  At  the  same  time  arose 
the  question  of  providing  for  persons  who  wished  for  more 
thorough  and  advanced  training  than  could  be  given  in  even- 
ing classes.  The  financial  difficulties  under  which  the  School 
labors  made  it  a serious  problem  to  meet  these  new  demands. 
This  problem  has  been  solved  along  two  lines. 

In  191 1 the  Rand  School  inaugurated  its  Full-Time  Course, 
for  comrades  who  could  arrange  to  devote  themselves  wholly 
to  intensive  study  for  a term  of  six  months.  In  the  four 
years  that  have  since  gone  by,  sixty-one  persons  have  entered 
this  course. 

In  1913  after  some  experimental  attempts,  the  Rand  School 
definitely  launched  its  Correspondence  Department,  which  met 
with  a warm  welcome.  Up  to  the  present  time  correspondence 
courses  have  been  taken  up  by  about  3,600  persons.  The  Na- 
tional Executive  Committee  has  formally  endorsed  this  work 
and  advised  locals  to  form  study  classes,  and  several  State 
Secretaries  have  spoken  in  warm  terms  of  the  service  rendered 
by  such  classes  in  strengthening  the  party  organization. 

An  important  new  department  is  being  organized,  which 
has  a double  function — to  investigate  problems  of  vital  interest 
to  the  Socialist  and  Labor  Movement  and  present  the  data  and 
conclusions  in  such  form  as  to  be  of  practical  use  to  editors, 
lecturers,  committees,  and  public  officials;  and  at  the  same  time 
to  instruct  and  train  a group  of  young  men  and  women  in  the 
technique  of  original  research,  so  that  the  development  of  the 
work  may  keep  pace  with  the  growing  needs  of  the  party  and 
the  unions. 


43 


The  Rand  School  is  controlled  by  the  American  Socialist 
Society,  an  incorporated  body,  which  has  always  followed  the 
policy  of  taking  in  only  party  members.  The  detailed  admin- 
istration is  in  the  hands  of  an  Executive  Secretary  and  an  Edu- 
cational Director,  chosen  by  and  responsible  to  a Board  of 
Directors,  elected  annually  by  the  Society. 

An  idea  seems  to  have  got  abroad  that  the  Rand  School  is 
a richly  endowed  institution.  Unfortunately,  this  is  far  from 
true.  From  the  beginning  its  tasks  and  its  expenses  have  been 
larger  than  could  have  been  foreseen.  They  have  grown  from 
year  to  year,  and  they  will  go  on  growing.  The  income  from 
the  Rand  Fund  has  never  been  sufficient  to  meet  the  needs. 
This  fund,  moreover,  is  subject  to  diminution  and  ultimate  ex- 
tinguishment. 

As  it  now  stands,  in  order  to  go  forward  without  fear,  the 
Rand  School  ought,  in  addition  to  the  fluctuating  and  eventually 
diminishing  income  from  the  Rand  Fund  and  the  revenue  de- 
rived from  tuition  fees,  benefit  entertainments,  and  book  sales, 
to  have  the  assurance  of  $3,500  a year  for  its  General  Fund 
and  at  last  $2,000  a year  for  its  Scholarship  Fund,  which  is  used 
in  aiding  desirable  Full-Time  students  who  are  unable  to  pay 
their  own  wa}’  in  full. 

Single  contributions  or.  better  still,  pledges  of  annual  con- 
tributions to  be  paid  at  stated  times  will  be  warmly  welcomed 
by  the  Executive  Secretary,  upon  whom  rests  the  daily  re- 
sponsibility of  “keeping  up  the  steam.” 

Thus,  from  small  beginnings,  the  Rand  School  has  steadily 
grown  in  response  to  the  needs  of  the  movement,  until  to-day 
it  can  fairly  claim  to  rank  as  the  Workers’  University  of  the 
United  States.  Taking  all  departments  into  account,  it  has  had 
more  than  two  thousand  students  in  the  year  1914-15,  and  about 
ten  thousand  during  the  nine  years  of  its  existence.  Its  Di- 
rectors feel,  however,  that  only  a start  has  been  made.  They 
intend  to  go  on,  as  in  the  past,  with  a minimum  of  wordy 
promise  and  a maximum  of  solid  achievement,  confident  that 


44 


honest  and  unpretentious  service  will  bring  the  support  neces 
sary  for  further  development. 

Instructor!?  and  Lecturers,  1915-1916: 

Samuel  E.  Beardsley  Juliet  Stuart  Poyntz,  A.  M. 

Louis  B,  Boudin  L M.  Rubinow,  Ph.  D. 

August  Claessens  Max  Schonberg 

Benjamin  C.  Grueneerc,  Ph.  D.  Prof.  James  T.  Shotwell 
Morris  Hillquit  John  Spargo 

Prof.  Scott  Nearing  N.  I.  Stone,  Ph.  D. 

and  others 


Educational  Director,  Algernon  Lee 
Executive  Secretary,  Bertha  PL  Mailly 


45 


WHAT  THE  NEW  YORK  CALL  IS 
What  it  Hopes,  Believes  and  Does. 

Prints  up-to-date  news,  condensed  for  quick  reading,  for 
earnest,  thoughtful,  busy  people. 

Enlarges  and  comments  editorially  upon  news  affecting  the 
great  struggle  of  the  people  to  restore  and  maintain  their  rights 
against  the  encroachments  of  concentrated  wealth. 

Specializes  on  announcements  of  meetings  of  organized  la- 
bor, and  meetings  in  the  interest  of  militant  and  advancing 
democracy. 

Unlike  other  daily  newspapers,  The  Call  does  not  depend 
upon  the  advertising  patronage  of  “Big  Business.”  It  eman- 
cipated itself  from  the  dictation  of  department  stores  and  cor- 
porate interests,  which  control  or  limit  the  editorial  expres- 
sions of  other  dailies,  before  assuming  the  task  of  emancipating 
others.  It  is  heavily  mortgaged  to  the  working  men  and  women 
who  purchase  and  contribute  to  its  support,  but  it  is  out  of 
debt,  free  and  independent,  so  far  as  “Big  Business”  is  con- 
cerned. Do  you  know  of  any  other  newspaper  like  it? 

It  contains  editorials  and  contributed  articles  that  are  de- 
cidedly “different.”  Written  by  specialists  of  world-wide  re- 
nown, they  throw  upon  the  gerat  moving  picture  drama  of  the 
world’s  events  illuminating  side-lights  and  comments  necessary 
to  a complete  understanding  of  the  tragedy  of  ages,  namely, 
“THE  STRUGGLE  OF  THE  CLASSES”— the  tragedy  that  is 
as  old  as  the  stage  of  life. 

The  Call  believes  that  the  present  industrial  system  divides 
human  beings  into  antagonistic  classes  that  must  inevitably 
make  war  upon  each  other,  regardless  of  the  nationality,  age, 
sex,  color,  politics  or  religion  of  the  people  involved. 

Neglecting  your  press  means  neglecting  your  own  cause, 
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misled  public  opinion.  You  cannot  afford  to  do  this.  You 
cannot  possibly  wish  to  disarm  yourselves  in  favor  of  those 

46 


interested  in  your  submis^iveness,  your  ignorance  and  helpless- 
ness. 

You  have  a splendid  opportunity  of  seeing  your  cause  ef- 
fectively represented  by  a powerful  press  of  your  own,  The 
New  York  Call. 

The  men  and  women  who  write  and  publish  The  Call, 
without  laying  claim  to  any  particular  virtue,  have  deliberately 
chosen  to  make  it  the  voice  and  champion  of  the  working  class 
and  the  working  class  only,  believing  that  the  interests  of  hu- 
manity at  large  are  best  served  by  the  success  of  the  work- 
ing class. 


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47 


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48 


The  Socialist  Party  Needs  You 


But  it  needs  you  trained  in  the  best  ways  of  doing  things 
and  educated  in  the  knowledge  of  International  So- 
cialism. 

Every  state,  every  city  is  calling  for  organizers,  speakers, 
writers  and  secretaries.  Sometimes  these  positions  are 
compensated,  sometimes  not.  Do  you  want  to  respond 
to  the  call? 

The  day  of  fighting  capitalism  with  a few  devoted  soap- 
boxers is  past.  Now  we  must  prepare  ourselves  to  meet 
their  methods  with  equally  good  methods.  Capitalism 
has  all  the  money  it  needs  to  train  its  agents.  The  So- 
cialist Party  has  not. 

But  in  a few  months'  work  at  the  Rand  School  of  Social 
Science,  you  can  equip  yourself  to  respond  to  the  call  of 
the  workers'  militant  movement.  In  our  six  months' 
Full-Time  Course  we  give  you  courses  in  the  theory  of 
Socialism  and  all  Social  Problems  and  also  practical 
courses  in  Organization  Methods,  in  English  and  Public 
Speaking. 

The  Course  begins  immediately  after  election  and  ends 
the  last  of  April.  Begin  to  prepare  now  for  next  year. 
Send  for  full  information  to 

THE  RAND  SCHOOL  OF  SOCIAL  SCIENCE 
140  East  19th  Street 
New  York  City. 


The  Rand  Book  Store 

140  East  19th  Street,  New  York 


A center  for  Socialist  and  Radical  Books  and  Peri- 
odicals. - A Store  where  any  book  on  the  market 
may  be  ordered.  All  profits  on  the  sale  of  books 
go  to  the  support  of  the  school.  Therefore  every 
book  you  buy  or  order  of  the  RAND  BOOK 
STORE  contributes  to  the  welfare  of  the  Workers* 
University  of  the  United  States.  Catalogues  and 
Lists  of  books  on  special  subjects  sent  FREE  on 
application. 


Subscribe  for  your  periodicals  through  the 

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We  ask  your  patronage  for  the  benefit  of  the 
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